Expensing Inventory after severing ties

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taxquestions
Posts: 42
Joined: Tue Dec 18, 2018 6:31 pm

Expensing Inventory after severing ties

Post by taxquestions »

I severed ties to Canada 1/20/2020. I live in USA now.

My 1/20/2020 Sole Prop T2125 closing inventory value is ~$10k. I'm continuing my business from the US and selling said inventory under my US Sole Prop and LLC in Canada (3rd party fulfillment, no permanent Canadian establishment)

Q: Is there a way to "expense" this remaining ~$10k inv on my final Canadian return so I can have a 1/20/2020 T2125 closing inventory valuation of $0 instead of $10k? Are there any forms / deemed dispositions I must file to do this?
taxquestions
Posts: 42
Joined: Tue Dec 18, 2018 6:31 pm

Re: Expensing Inventory after severing ties

Post by taxquestions »

My american self (US SOLE PROP) has been mirroring an exact replica of my Canadian sole-prop return as US citizens report / file taxes regardless of residency. So my US returns are an exact replica of my Canadian returns.

Selling to my self would not make any sense as this same inventory already exists on my US books, because like I said I am a dual citizen and report my US taxes regardless of residency.

My inventory on my US return for 1/20/2020 is also ~$10k CAD. If I sold to myself my US inventory would now be ~$20k CAD (which makes no sense.).
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