Selling equities (winners) after moving back to Canada

[Fug1]

My wife and I are Canadians currently living in the USA as permanent residents. We're going to be moving back to Canada sometime next year (2019). We'll be giving up our green cards after we move back.

We have some taxable accounts, which I understand we will need to close when we move back to Canada. I've learned from this forum (thank you!) that we should sell the losers before we leave (using the loss to reduce USA tax owed) and sell the winners after we leave (to eliminate capital gains tax). Not sure whether we'll file dual-status or full year for 2019, but to be safe we'd like to sell the winners in 2020.

My question is around the logistics of the asset transfer. Since I need to close brokerage accounts in the USA and move the assets back to Canada in 2019, how is this managed without actually selling the assets and triggering capital gains tax in the USA? Most of our assets are ETFs and individual stocks, which I assume can be transferred fairly easily between USA and Canadian brokerages? But some of our assets are Fidelity mutual funds...are there any Canadian brokerages out there that will accept the transfer of a Fidelity mutual fund?

Thank you in advance for your help!

[nelsona]

To avoid the cap gains, you cannot be a US 1040 filer, so for GC holders, you need to renounce first, so not very practical, but doable over the long run. The maneuver =is really for non-citizens, non-GC holders.

Most brokerages will allow you to "hold" funds for a short time, not allowing purchase or trades. Stocks can be moved to Canada with triggering gains. Mutuals will need to be sold eventually, which makes the time it takes to renounce green card difficult to get this done.

[Fug1]

Thank you, Nelson. Your response was very helpful. I contacted my brokerage (Fidelity) and confirmed that I will be able to keep my brokerage account open with Fidelity after I become a USA non-resident and relinquish my residency status. The brokerage account will be restricted to "closing trades only", which means I can sell but cannot buy (automatic re-investments are okay).

FYI, Fidelity's current policy is documented here: https://www.fidelity.com/trading/faqs-a ... aq_about15

You mentioned that timing can be a challenge, so I'd like to get your input on the below sequence of events to pull this off. Does this make sense?

1. Move back to Canada in June, 2019 (residing in USA approx 5 months in 2019)
2. Relinquish Green Card in Q3 2019. We are not "covered expatriates" under the US expatriation rules, and therefore would not need to pay exit tax.
3. Contact Fidelity in Q3 2019 to change USA residency and immigration status.
4. File full-year 1040 for 2019. I believe the substantial presence test is applicable here since we will no longer have Green Cards, and so I believe we will need to file as USA residents for 2019?
5. Sell assets in 2020 and transfer the funds to a Canadian brokerage, ensuring that Fidelity does not withhold any capital gains taxes.

Thank you!

[nelsona]

3. You don't HAVE to file full year 1040 in 2019, SPT doesn't apply since the treaty would make you Cdn resident from the day you moved. But it is rarely better to file dual status, so you will WANT to file full year.

[Fug1]

Excellent clarification, thank you again Nelson.