Sale of stock in US - living in Canada
Moderator: Mark T Serbinski CA CPA
Sale of stock in US - living in Canada
In 2009 I sold some stock I am holding is a US account (Schwabs). No US taxes were withheld on this sale. Now I live in Canada (since 2006). I am planning to include this sale to my Canadian tax return, but do I have to file in the US as well, even if no taxes were withheld? Thanks.
Thanks for the quick reply Nelsona !
Like I said, I moved back to Canada in 2006 (after 9 years in the US). I believe (based on previous information you gave me a long time ago) that the base price for my stocks is equals to the price on the day I entered Canada again (in 2006). Can you refresh my memory ? Is that correct ?
Like I said, I moved back to Canada in 2006 (after 9 years in the US). I believe (based on previous information you gave me a long time ago) that the base price for my stocks is equals to the price on the day I entered Canada again (in 2006). Can you refresh my memory ? Is that correct ?
I have a follow up question... or concern, I should say. (sorry for the long story)
When I moved back to Canada in 2006, I tried to change my Schwab address to my new Canadian address. That's when I learned that I could not do that and I was told by Schwab that I had to close my account. I really didn't want to sell my stock at that time and I was told (by a customer representative at Schwab!) to change my address back to a US address, like the address of a friend... which I did ! Since then, I kind of fell in a gray zone because I wanted to avoid to attract attention to my account. That's why I had not done any selling or buying from that account since then. I just wanted to keep it quietly alive until I decide to sell everything in the future and close the account at the same time. But last year I was forced to sell some stock (about 1/3 of them) because I have a margin loan on that account and the stock fell too low, forcing me to sell.
As Nelsona suggested, I will include the sell of my US stock in my Canadian tax return, but I am not planning to file any US tax form for 2009. But can this situation become a problem for me on the long run? Can the IRS force me to withhold US taxes on future selling ? Can Schwab find out about my Canadian residency and force me to close my account ?
When I moved back to Canada in 2006, I tried to change my Schwab address to my new Canadian address. That's when I learned that I could not do that and I was told by Schwab that I had to close my account. I really didn't want to sell my stock at that time and I was told (by a customer representative at Schwab!) to change my address back to a US address, like the address of a friend... which I did ! Since then, I kind of fell in a gray zone because I wanted to avoid to attract attention to my account. That's why I had not done any selling or buying from that account since then. I just wanted to keep it quietly alive until I decide to sell everything in the future and close the account at the same time. But last year I was forced to sell some stock (about 1/3 of them) because I have a margin loan on that account and the stock fell too low, forcing me to sell.
As Nelsona suggested, I will include the sell of my US stock in my Canadian tax return, but I am not planning to file any US tax form for 2009. But can this situation become a problem for me on the long run? Can the IRS force me to withhold US taxes on future selling ? Can Schwab find out about my Canadian residency and force me to close my account ?
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[quote="maricami"]I have a follow up question... or concern, I should say. (sorry for the long story)
When I moved back to Canada in 2006, I tried to change my Schwab address to my new Canadian address. That's when I learned that I could not do that and I was told by Schwab that I had to close my account. I really didn't want to sell my stock at that time and I was told (by a customer representative at Schwab!) to change my address back to a US address, like the address of a friend... which I did ! Since then, I kind of fell in a gray zone because I wanted to avoid to attract attention to my account. That's why I had not done any selling or buying from that account since then. I just wanted to keep it quietly alive until I decide to sell everything in the future and close the account at the same time. But last year I was forced to sell some stock (about 1/3 of them) because I have a margin loan on that account and the stock fell too low, forcing me to sell.
As Nelsona suggested, I will include the sell of my US stock in my Canadian tax return, but I am not planning to file any US tax form for 2009. But can this situation become a problem for me on the long run? Can the IRS force me to withhold US taxes on future selling ? Can Schwab find out about my Canadian residency and force me to close my account ?[/quote]
I think nelsona's suggestion is right that you will include the sell of your US stock in your canadian tax return. I don't think so if IRS force you to withhold US taxes on the future selling and Schwab find out about your canadian residency and force you to close your account. Just wait for others opinion and suggestion. :)
When I moved back to Canada in 2006, I tried to change my Schwab address to my new Canadian address. That's when I learned that I could not do that and I was told by Schwab that I had to close my account. I really didn't want to sell my stock at that time and I was told (by a customer representative at Schwab!) to change my address back to a US address, like the address of a friend... which I did ! Since then, I kind of fell in a gray zone because I wanted to avoid to attract attention to my account. That's why I had not done any selling or buying from that account since then. I just wanted to keep it quietly alive until I decide to sell everything in the future and close the account at the same time. But last year I was forced to sell some stock (about 1/3 of them) because I have a margin loan on that account and the stock fell too low, forcing me to sell.
As Nelsona suggested, I will include the sell of my US stock in my Canadian tax return, but I am not planning to file any US tax form for 2009. But can this situation become a problem for me on the long run? Can the IRS force me to withhold US taxes on future selling ? Can Schwab find out about my Canadian residency and force me to close my account ?[/quote]
I think nelsona's suggestion is right that you will include the sell of your US stock in your canadian tax return. I don't think so if IRS force you to withhold US taxes on the future selling and Schwab find out about your canadian residency and force you to close your account. Just wait for others opinion and suggestion. :)
bernadette c. junsan
The keeping of your US account did not and does not affect your tax situation.
Keeping the account with a fake US address is a regualtory issue. The schwab person was breaking fed regs when he told you to fake the address, and you were complicit.
The correct thing for you to do was to TRANSFER your holdings to a Cdn broker when you moved,
Again, this would have had no impact on taxess in either US or Canada.
Keeping the account with a fake US address is a regualtory issue. The schwab person was breaking fed regs when he told you to fake the address, and you were complicit.
The correct thing for you to do was to TRANSFER your holdings to a Cdn broker when you moved,
Again, this would have had no impact on taxess in either US or Canada.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
There need not be any commercial link between the two transfering brokers.
You find a broker in canada, tell them you wnat to give them your business, and they will do anything they need to transfer the stocks.
This is done routinely, whether cross-border or not, when one wants to change brokers.
You find a broker in canada, tell them you wnat to give them your business, and they will do anything they need to transfer the stocks.
This is done routinely, whether cross-border or not, when one wants to change brokers.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
I can't believe it's that simple ! I should have done this earlier. I guess it's not too late for me to do this, right ? Does it have to be an independent Canadian broker, or can it be done with a bank in their brokerage branch?
Last question (I promise!), since I have a margin loan on this account, is it better to pay it back cash, before doing the stock transfer to Canada ?
Last question (I promise!), since I have a margin loan on this account, is it better to pay it back cash, before doing the stock transfer to Canada ?
Yes it is that simple (if you have stocks, mutuals must be sold).
Any broker, full-service or discount doesn't matter.
As to the margin account, that is up to the lender. Most lenders require some kind of payback before moving accounts.
Any broker, full-service or discount doesn't matter.
As to the margin account, that is up to the lender. Most lenders require some kind of payback before moving accounts.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing