IRS cost basis of Canadian-held investments

[moneyissues123]

Hi,

What basis does the IRS use for determining the cost (i.e., book value) of Canadian-held investments for capital gains purposes? Does the IRS use the date of acquisition, date of departure from Canada, or date of residency of USA - or something else entirely? Does anyone have the soirce for this information?

Thanks

[nelsona]

IRS uses cost basis in USD when the cost is incurred, just like CRA does, except in C$, so that would primarily be costs date of acquisition, as well as costs incurred subsequently from distributions, dividends, etc. Each cost portion would be determined in the USD value at that time.

Now, if your investment went thru a deemed disposition in Canada, in order for IRS to recognize it, you have to file a statement showing your deemed dispositions when you left. Otherwise the deemed disposition is ignored.
IRS REv Proc 2010-19 been described in detail elsewhere. Happy browsing

[moneyissues123]

Thanks for the reply. Yes, the non-registered investments went through a deemed disposition in Canada. I will read the references source.