Net loss between countries

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CJFender
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Joined: Mon Mar 18, 2019 11:27 am

Net loss between countries

Post by CJFender »

I emigrated to US and have a net loss in Canada after paying departure tax. Is there any way to recognize this net loss against future gains in US?

For example, I sold a mutual fund that was part of the emigrated departure tax that has a capital gain... can I use that previous net loss to offset this gain? When I claim the gain, do I need to claim it in Canada with foreign tax credit from US or do I claim it in US using the emigrated amount as the new cost basis?
nelsona
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Re: Net loss between countries

Post by nelsona »

Your losses in Canada cannot be used in US, nor vice versa.
When you do actually sell, you will be allowed to use your original cost basis to determine you gain/loss in US. If you had an over all gain, you would be allowed to use your deemed disposition price as your new cost basis.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
CJFender
Posts: 3
Joined: Mon Mar 18, 2019 11:27 am

Re: Net loss between countries

Post by CJFender »

thanks @nelsona! just to clarify - you're saying I should only report the gain via US taxes directly (using either original cost basis or deemed disposition, as applicable) and not via Canada taxes with a US tax credit right?
nelsona
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Re: Net loss between countries

Post by nelsona »

No idea what you are asking.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
CJFender
Posts: 3
Joined: Mon Mar 18, 2019 11:27 am

Re: Net loss between countries

Post by CJFender »

Sorry if I'm unclear. Here is a more complete summary...
I moved to US in 2016 and did departure tax from Canada with a net loss overall, but contained a net gain on a specific Canadian mutual fund. From 2017 on I'm considered a US resident for tax reasons. In 2017 I sold the Canadian mutual fund for a further net capital gain. I still need to submit 2017 taxes, which needs to include this further net capital gain.

My question is: do I need to file any 2017 Canadian capital gains tax for this single mutual fund sale, where I would submit the Canadian tax paid as a foreign tax credit on my US return? Or do I simply file it as a straight capital gain on my US tax return? Thanks!
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
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Re: Net loss between countries

Post by nelsona »

Because you had an overall loss on your sdeemed disposition, you have no option but to use the cost basis for your investments, especially since there is no advantage to using the lower cost basis.

You cannot cherry-pick which deemed items to use the higher "deemed" sold basis.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
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