Money Transfer - Canada to US

[penjoy777]

With the Canadian $ being at parity with US$, I was hoping to transfer cash sitting in savings account in Canada to US. I am a non resident to Canada (filed departure tax in 2007) and have been reporting all my financial accounts to US.
My question is that would I be "taxed" (US/Canada) for transferring this money to US?
Is there a way to transfer money (approx $80k) to US other than through the banks (really high charges as well as low conversion rates!))

[nelsona]

There would be no tax on either end.

For such a large transation tpyou should be using a forex broker, not the bank.

[penjoy777]

Thanks! Any suggestions on forex brokers!

[jewel]

Many people have recommended opening an account with Customhouse.org. Note that it took me 2 weeks to open an account with them and set up electronic transfer links. Once you are done, the nice thing about it is that you have control over when to push the transaction and there are no fees on the trasaction itself or transfer to linked accounts. You can see the rate you'd get on the website and the customer service will even tell you the spread (how much they make) on the transaction if you ask. For 80K, the spread on my account is 0.65%. They have now been aquired by Western Union.

I compared with my brokerage account at Fidelity and they offer the same rate. There you have no set-up but need to add wire fees. You fill out a form and they call you with a spot rate (exchange rate) when they're ready. You can accept or decline (start over later).

[jewel]

@nelsona: I'm confused on when money transfers are taxed and when not. I read on this forum/was told that any transaction generating an exchange gain over $200 from the date the money was aquired (even prior to moving to the US) would trigger a capital gain. Can you comment on why it wouldn't apply in this case?

I am in a similar situation. Although in my case I purchased certificates of deposits in Canada. Not sure what the acquisition date is on the principal (the date when I received the money in Canada or the date when I cash the certificates). OK, obviously I will receive a NR4 for the interest.

Thanks!

[nelsona]

A gain on exchange can occur on any transaction that changes foreign currency into anything else, not just US dollars. And that transaction can occur completely within canada.

Merely transferring money form canada to US doe nothing to change it from one currency into something else.

[jewel]

OK, so buying a certificate in Canada is a transaction and someone would incure a gain or a loss in capital on the principal if there is a different exchange rate when the certificate expires, even if the money is left in Canada and if there are no tax papers issued from the bank.

On the other hand, if someone receives a $10,000 CAD gift worth 9,000 USD and leaves it in a savings account for 2 years before moving it to the US when it's valued at 10,000 USD, then is the $1000 increase in value isn't a gain because there were no transaction prior to the move ?

[nelsona]

Each time you recieve Cdn dollars (be it from an inheritance, wages, pension, currency trade), in the eyes of IRS you are getting a commodity worth xx USD. Everytime you buy ANYTHING with a Cdn dollar, be it a car, chewing gum, a US dollar or a british pound, you are 'selling' that Cdn dollar for a certain price in yy USD

If that transaction results in a currency gain or loss of $200 (xx is more or lees than yy by $200), it is reportable as a cap gain/loss.


But moving a Cdn dollar from one account to another does not trigger anything, just like move 100 shares of ABC from one broker to another doesn't trigger anything.


I wouldn't be worrying too much about this.