US Exit Tax and capital gain in Canada

[pyt]

LPR planning a return to Canada. meeting all three conditions to avoid being considered a "covered expatriate" therefore not subject to US exit tax.

Purchased US Treasury Stripped bond 15Aug40 at issue in 2013, and has been reporting earned interest yearly under OID rules. Current market value is about $30,000 below Total Cost basis but I intent to keep the bond until it matures. I do not have other securities with offsetting capital gains.

Because of the deemed disposition when becoming a Canadian resident, would this lower "acquisition" cost (being the current market value) require me to declare a capital gain when the bond matures?

Thanks in advance

[nelsona]

Unfortunately, Yes. You should probably sell now or very soon after entering Canada; or *hope* that you can make a significant loss elsewhere in the two or three years before you do sell it (which is never good).