File Retroactive Election?

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

Moderator: Mark T Serbinski CA CPA

Post Reply
paul1980
Posts: 7
Joined: Tue Aug 30, 2016 3:47 pm

File Retroactive Election?

Post by paul1980 »

I recently became aware that in the year of arrival to the US (after departure from Canada), the treaty allows me to step-up the ACB of my non-registered shares to the market value on my arrival date by filing an 8833 form with my return.

However, I failed to do this upon arrival. Does anyone know if I can retroactively file this election? If so, should I do it now, or when I sell the shares and what would be involved?
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

When did you arrive?

IRS Rev Proc 2010-19 outlines the process for claiming this ACB, based on the deemed disposition that took place when you left.

If you can only be retroactive to the earliest open tax return you have (uaully 3 years bac). If the deemed disposition took place before this, you are probably out of luck, alythough there may be some wiggle room in the Rev Proc wording.

it would need to be done now rather than waiting for future sale.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
paul1980
Posts: 7
Joined: Tue Aug 30, 2016 3:47 pm

Post by paul1980 »

Thanks so much.

I've been in the US for about 2 and a half years, so looks like I may be in luck :)

Would I file an adjustment to my return when I arrived or just do it for the current year?
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

You would file an amended return for 2014
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
paul1980
Posts: 7
Joined: Tue Aug 30, 2016 3:47 pm

Post by paul1980 »

Thank you.

I was doing some more reading on this forum and I came across something regarding an election for your principal residence.

When I left Canada I also owned a home, and did not sell it or rent it out yet. My brother was renting and I let him move in to look after the property. He is still living in the home and I’m not sure when I will sell it.

Should I have filed an election for this as well? Can this be filed retroactively like the election for my stocks?

This site is great by the way, it has been a major help for me. I’m so glad I found it.
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

No. Cdn taxable property is not subject to deemed disposition when leaving Canada, so does not use this maneuver.

Selling your former principle residence after becoming a US taxpayer was already addressed in the treaty years ago: you get to use the FMV at departure as the ACB if that benefits you, which it no doubt will if you do not sell within 3 years of leaving it, which seems unlikely at this point.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
paul1980
Posts: 7
Joined: Tue Aug 30, 2016 3:47 pm

Post by paul1980 »

Great, thanks!

Yes, not likely that I will be selling before the 3 year mark.

How do I determine what the value was on departure? Can an appraisal be done retroactively? What about a letter from a real estate agent, would that be acceptable?
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

You would need a formal appraisal, which should have been done when you left in any event.
An appraiser might be able to do one retroactively. I wouldn't relay on a letter, from a real estate agent, just on principle.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
Post Reply