Hi Nelson,
in 2010, my wife and I moved from US to Canada, I closed my US accounts, and returned my Green Card and stopped being a US resident for tax purposes. My wife is a USC, but she didn't work in Canada, so she didn't have to file taxes with IRS either.
When we moved permanently to Canada in 2010, I brought with us our life savings of $300k USD, converted at around 1:1 or so to $300k CAD.
I thought we would live in Canada permanently, but life has different plans, fast forward 5.5yrs, circumstances changed, my wife needs to move back, long story short we have applied for a permanent US visa for me, so its likely that I will receive a new green card after I move back and activate my LPR status at the airport, after January 1, 2016
The problem is that, as you know, CAD has been getting battered, so if we assume that in January 2016, the exchange is going to be 1CAD=.75USD, if I convert everything to USD I will have only have $220k USD or less. Sad situation :(
I would prefer to keep my savings in CAD and wait until sometime in future, when exchange rate will be closer to a 1:1, even if I have to wait till 2018, maybe even longer :(
1) I called some banks in US, no banks offer CAD-currency checking accounts, so I will need to keep my $300k CAD in my Canadian bank? Have you heard of any other way to keep my CAD cash in the US? is there a difference between the CADs are kept in a US account vs Canadian account? And potential problem of leaving this money in Canada? (I understand I would have to file yearly FBAR, as it is over 10k)
2) Correct if I'm wrong, but I think I am allowed to leave an account in Canada with this cash and it will not get in the way of being "deemed to have severed all ties?" (will have no home, or family left in Canada)
3) Let's say in 2018, the CAD to USD miraculously becomes 1:1, and I convert all to USD, does this mean that IRS is going to presume that I had a $80k Capital Gain?! (ouch). If this is true, then I'd have to pay %15 off the $80k ?
4) Is there anything I can do with my CAD to USD conversion to avoid being taxed on capital gain? Especially since I originally brought this $300k to Canada with me?
Thx for this forum, your insight is appreciated!
Moving to US, can't convert CAD>USD due to exchange rate
Moderator: Mark T Serbinski CA CPA
1/2. Your only real option to keep Cdn CASH is in a CDn account. Accounts are not considered ties if you live in US.
3/4. If indeed you had the ONE SUM of $300K that you converted in 2010 and would convert back in 2018 at the same rates, then there would be no cap gains.
Question: Although your spouse did not need to filer a US yax return, since she did have Cdn bank accounts with you, she was supposed to FBAR each year. Did she do this?
Bigger question. Why would you sit on $300K of cash in any currency for 5 years!? You are now reaping the reward of doing that.
3/4. If indeed you had the ONE SUM of $300K that you converted in 2010 and would convert back in 2018 at the same rates, then there would be no cap gains.
Question: Although your spouse did not need to filer a US yax return, since she did have Cdn bank accounts with you, she was supposed to FBAR each year. Did she do this?
Bigger question. Why would you sit on $300K of cash in any currency for 5 years!? You are now reaping the reward of doing that.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
1/2.
Glad its not ties, I will still keep looking for a US-based bank that will allow CAD account. Read something about EVERBANK, maybe if I transfer to them and keep as CAD, won't have to file FBAR either in coming years. Not a big deal to file, but less forms to keep up with.
3/4
Actually the $300k USD I converted to CAD in several chunks of $50k within a few months in 2010, used half for downpayment on a house (now sold) so still have the $300k CAD in my account. Would the fact that this sum wasn't just sitting perfectly still from 2010 to 2018 spoil my chance of not treating it as non-capital gain in 2018?
The joint account with wife, it was always kept under 10k, so as not to require filing FBAR (only in 2010, one month it was over $10k, so we filed FBAR for that year). The $300k is in my separate personal.
Glad its not ties, I will still keep looking for a US-based bank that will allow CAD account. Read something about EVERBANK, maybe if I transfer to them and keep as CAD, won't have to file FBAR either in coming years. Not a big deal to file, but less forms to keep up with.
3/4
Actually the $300k USD I converted to CAD in several chunks of $50k within a few months in 2010, used half for downpayment on a house (now sold) so still have the $300k CAD in my account. Would the fact that this sum wasn't just sitting perfectly still from 2010 to 2018 spoil my chance of not treating it as non-capital gain in 2018?
The joint account with wife, it was always kept under 10k, so as not to require filing FBAR (only in 2010, one month it was over $10k, so we filed FBAR for that year). The $300k is in my separate personal.
Using your figures, only the 150K that was left untouched has a cost of $140. The money that was from the house sale has a more current value, since each time the funds are changed into something else, house, cash, toothpaste.. changes its cost basis.
Something your spouse has to watch for now is the "gain" she made on her mortgage. Its a weird rule, but since you bought the house (mortgage) at the 1:1, and you paid it off at the 75c rate, she made a giain on her half.
There are couple of threads on this ...
Something your spouse has to watch for now is the "gain" she made on her mortgage. Its a weird rule, but since you bought the house (mortgage) at the 1:1, and you paid it off at the 75c rate, she made a giain on her half.
There are couple of threads on this ...
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Cross-Border Banking
I would leave my cash in a Canadian bank account for now (if you don't need it) until the exchange rate recovers.
Both RBC Bank and TD Bank have presence in both Canada and the USA and make it easy for a customer to have both credit cards and bank accounts in both countries.
Even though RBC Bank is now only a virtual bank in the USA (no brick and mortar branches), they do have an excellent web page to manage both your accounts in Canada and the USA (all on one page). One tab is all your Canadian accounts, and the other tab for your USA accounts. (including Credits cards). To move money from Canadian to USA accounts or (vice-versa), it's a simple matter of a few mouse clicks and you're done. Check it out at RBCBANK.com
With TD Bank, you can have accounts and Cards in both Canada and the USA, but they don't have a single integrated web page yet...
PS: I don't work for either bank, but I have used the RBC Bank (and recently, TD Bank) since moving from Canada to USA 12 years ago, and it works! An additional benefit of working with TD Bank or RBC Bank is that they can work/use your Canadian Credit rating to get USA mortgages or loans or Credit cards...
Both RBC Bank and TD Bank have presence in both Canada and the USA and make it easy for a customer to have both credit cards and bank accounts in both countries.
Even though RBC Bank is now only a virtual bank in the USA (no brick and mortar branches), they do have an excellent web page to manage both your accounts in Canada and the USA (all on one page). One tab is all your Canadian accounts, and the other tab for your USA accounts. (including Credits cards). To move money from Canadian to USA accounts or (vice-versa), it's a simple matter of a few mouse clicks and you're done. Check it out at RBCBANK.com
With TD Bank, you can have accounts and Cards in both Canada and the USA, but they don't have a single integrated web page yet...
PS: I don't work for either bank, but I have used the RBC Bank (and recently, TD Bank) since moving from Canada to USA 12 years ago, and it works! An additional benefit of working with TD Bank or RBC Bank is that they can work/use your Canadian Credit rating to get USA mortgages or loans or Credit cards...