Deemed disposition at departure with subsequent value losses

[tony9409]

When I moved to the US I elected to defer tax payment on assets deemed disposed at departure hoping they'd appreciate. Boy I was wrong...I still hold the assets which have lost most of their value such that selling them won't even pay the deemed taxes. Recently one of the mutual funds I had was wound up and they moved my money into it's replacement triggering a sale & substantive loss that I need to report. What can I do with CCRA to amend my deferral and how would I report these losses. Help...

[nelsona]

You are on the hook for what you owed at the time you left.

[Carson]

As usual, Nelson is absolutely correct.

There are only a very few assets (like Canadian private company shares) on which a post departure loss can be used to reduce your departure gain. Marketable securities do not qualify.

Sorry.

[nelsona]

CRA doesn't care about what happened to these stocks after you left.

IRS will give you the cap loss based on either their origianal cost or the deemd disposition price (your choice).

[nelsona]

The only way to get around deemed disposition on ordinary stocks that you hold when leaving is to defer the tax (like you did), but then hold on to them for a full 10 years while in US and then sell them.

I believe that the treaty allows at this point that the canada loses its right to tax the transaction, including the deemed disposition.

This does not apply to you.

[tony9409]

Ah so some possible relief...I pay tax on the mutual fund wound up and hold the rest which are stock for ~2 more years then sell in the tenth year (if I understood that correctly).

regards,

[nelsona]

As I said, I believe this is correct.