Moved back to Canada, selling stock/options

[maricami]

I moved back to Canada in July 06, after spending 9 years in CA, and I decided to follow Nelson's stock advice : "sell your losers before moving back, keep your winners". Here's the situation: Two years ago I purchased stocks from the company I used to work for. I was actualy exercising options I was given many years before that. I paid a lot of AMT the year I purchased the options. Most of that AMT is still available as a credit in the US. I know this credit is useless in Canada. Now I want to sell this stock, but I'd like to know when would be the best time based on these 2 points:

1- Since my return to Canada in July, this stock went down in price. Let's pretend it was at $25 in July and I sell it now at $20. Based on what I heard here before, it means that Canada would see this as a loss. Is that correct ? But my income since I moved back is minimal. What would happen if this loss was bigger than my actual Canadian income ?

2- At the same time I have to consider that I am planning to file a full year 1040 for 06. Meaning I might be able to recoup some of that AMT credit in the US.

Anyway, I don't know if this is too much or too little information, but my ultimate goal is to know if it's better to sell in 06 or in 07 ????????? I don't think I will file a 1040 for 07, because I will earn only Canadian income (I am planning to give back my GC before 07).

[nelsona]

In canada Stock losses (capital losses) can only be used against capital gains, so your other income from this year is irrelevant.

In US you can write off $3000 of your losses against income every year.

You could be denied this if it is veiwed by IRS that you sold after becoming non-resident, but this is unlikely.

I would be crystallizing my losses this year, more for the $3000 deduction rather than AMT, which is unlikley to be impacted either way.