CRA treatment of equity loss after moving to Canada

[napstolean]

HI All - I'm having a hard time getting a straight answer on this one:

Whilst a US resident/Canadian citizen, shares are purchased (alongside a VC round) in a private US company. Three years after moving to Canada (5 years after purchasing shares), company, still private, is sold to another company; shares are essentially valued at $0.

Is the resulting capital loss deductible in Canada? Without any offsetting US cap gains or income? If deductible, in what year must the loss be claimed?

Many thanks.

Nap

[nelsona]

For Cdn tax purposes:

The day you moved to canada, the Cost basis of your shares became the value on that date. The sale of the stock, or its exchage for some other stock, will trigger the capital loss (ie. you do have to dispose of the stocks), and you calculate and use this as you would any other stock loss (ie. against past or future capiatl gains). What happened before you moved is meaningless to CRA. Capitla gains and losses are not country-specific.

For US tax purposes:
If the sale of the shares is reportable in US (ordinarily they would not) you would calculate the loss based on the original price. But you are probably not taxable in US, so any losses (or gains) are not taxable, unless there is something quirky about these shares that would make them always taxable in US.

In any event without other future US income any capital loss is of no value in US.