Cnd working in the US - TFSA, USD into CAD

[drow]

Canadian citizen, working in the US under TN visa.

I've been browsing this forum for several months, and found many threads that proved to be insightful. I hope someone can help remove the last bit of doubt I have on the following:

1.a) After reading advice given on this forum, I'm planning to close my TFSA before Dec 31, 2016 in order to avoid additional tax prep costs, and complications for 2017; however, I fail to understand if these additional forms are required if the investments are sold and the money is kept in a CAD non-registered cash account.
1.b) If I am planning on returning to Canada in late 2017, would there be any benefit in closing the TFSA? I understand now that the TFSA should have been terminated before arriving in the US.

2. If I transfer USD (cash) from my US checking account to CAD (cash) into my Canadian checking account, will I be subject to capital gains/loss taxation? Will this be considered Canadian income, or need to be reported to the CRA given that the original US dollar amount was income, and therefore already subjected to US taxation? The transfer would be completed through TD crossborder banking.


Any advice, recommendations, or links to previously posted threads would be highly appreciated.

Thanks in advance.

[nelsona]

1 a/b) One is not allowed to trade in a Cdn non-registered BROKERAGE account if living in US. One can have any number of Cdn bank accounts. the TFSA is not only subject to trust reporting in US, it is also subject to plain income tax on the internal growth. If you can live with this extra reporting and tax (since you will have it for 2016, having it for 2017 should not pose much more of a hardship), and if you are sure you will leave US in 2017, I don't see the point of closing it.

Just to be clear, the advice to close TFSA is to do it before you become a US tax payer, which could occur on January 1 of the year you move, so PRIOR to moving to US, or the day you move, or the jan 1 of the year after you move depending on how you wish (or may be forced) to file in US.

2. No. transfers are no considered income in any jurisdiction. It would take 2 conversions to trigger any gains in US: USD to CDN and then back again.

[drow]

Thank you for that prompt, and concise response. You sir, are a legend.