Nelson, a few questions related to bump-ups at Cdn departure. Will be brief:
1) Is bump-up of CB to FMV at Cdn exit on principal residence for non-US persons by XIII(6) an AUTO bump, i.e. nothing needs to be done, automatic step-up?
2) Are you aware of any other AUTO bumps at departure besides Princ Res?
3) For bump-up election on assets subject to dep. tax by XIII(7), if you don't elect, then by default, original CB on said assets is maintained correct?
4) Is XIII(7) an ALL or NOTHING election, i.e. either all assets subject to dep. tax must be bumped up or else none, you can't pick and choose among them?
4) If you don't bump non-reg assets, can you use a strategy of selling all your gains but holding all your losses just prior to departure, so as to re-use the losses for US purposes as well, thus using losses twice?
5) California wrinkle: since Cali won't recognize Treaty bump by XIII(7), then it seems to me that you could use "sell the gains, hold the losses" strategy for Cali purposes. But by doing so, could you also use Treaty bump-up for federal IRS purposes or can you not simultaneously do both bump-up and holding of losses?
6) If you defer dep tax because you have a big gain, then you'd definitely want to bump up correct? (Because if you don't elect to bump, you'd have double taxation on ultimate disposition b/c US would tax the pre-US entry portion of gain as well?)
7) Is the reason there's no auto-bump on RRSPs for non-US persons because 89-45 (4)(02)(b) specifically excludes unrealized appreciation from the definition of "gross investment in the contract" under 72(c)(1)(a)? (If they did count unrealized appreciation it seems to me it would be an auto-bump.)
8) Technically, does the IRS's exclusion of pre-US entry gain from US taxation for non-US person RRSP holders come from 89-45? You've made reference in other posts to this IRS rule on the exclusion of pre-US basis from US tax being in place since 1985, so wanted to double-check source, and whether 1985 or 1989.
Bump-up questions
Moderator: Mark T Serbinski CA CPA
Not brief enough.
Fewer questions, please.
XIII(7) is interpreted and enforced by IRS using Rev Proc 2010-19. I'd suggest you read it before I answer these.
The change to cost basis is never automatic and only applies to investments that CRA mandated deemed disposition, not those elected by the taxpayer.
I would not necessarily agree that California will not accept deemed disposition as adjusted cost basis, since they would likely simply accept your 1040 values.
There is NEVER an automatic cost basis adjustment for RRSPs -- even for non-US citizens -- because RRSPs are not subject to deemed disposition. One must crystalize gains before becoming a US taxpayer to achieve the higher basis.
For US taxpayers, only non-deductible (on 1040) RRSP contributions are considered investments.
The taxation of RRSPs is as described in Rev Proc 89-45, with the caveat that now employer-sponsored RRSP contributions ARE deductible.
Fewer questions, please.
XIII(7) is interpreted and enforced by IRS using Rev Proc 2010-19. I'd suggest you read it before I answer these.
The change to cost basis is never automatic and only applies to investments that CRA mandated deemed disposition, not those elected by the taxpayer.
I would not necessarily agree that California will not accept deemed disposition as adjusted cost basis, since they would likely simply accept your 1040 values.
There is NEVER an automatic cost basis adjustment for RRSPs -- even for non-US citizens -- because RRSPs are not subject to deemed disposition. One must crystalize gains before becoming a US taxpayer to achieve the higher basis.
For US taxpayers, only non-deductible (on 1040) RRSP contributions are considered investments.
The taxation of RRSPs is as described in Rev Proc 89-45, with the caveat that now employer-sponsored RRSP contributions ARE deductible.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
cbnut,
While I applaud your enthusiasm, you've asked far too many questions for being a member here for a fortnight.
Nothing in your situation is particularly unique and not addressed here 100's of times in the past. Please accept the answers found in those threads.
While I applaud your enthusiasm, you've asked far too many questions for being a member here for a fortnight.
Nothing in your situation is particularly unique and not addressed here 100's of times in the past. Please accept the answers found in those threads.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing