Deemed Disposition

dan_tax1 · Post by **dan_tax1** » Mon Mar 21, 2005 3:41 am

I moved in 2004 to the US and have a large capital loss as a deemed disposition only. I purchased the stock in 2003/2004, but have a longer term focus than the date I departed. [8]

I want to sell in the US in some later years and use the actual purchase cost as the cost basis. I don't want to be considered having sold and reacquired the stock when I left the country. This rule seems short sighted.

Do I have to file the deemed disposition form if I have a large deemed loss? Also, I was in Canada for under a year since last being a US resident. Maybe the deemed disposition doesn't apply?
[8]

nelsona · Post by **nelsona** » Mon Mar 21, 2005 7:14 am

By IRS rules, US does not recognize the deemed dispo, so you are quite allowed to use your normal cost basis when you sell.

The US and Canada have simply agreed that the deemed dispo price can be used by the US taxpayer, if it is advantageous to him.

But for Cdn purposes, you really have no choice, as it is a reporting requirement (remember the assets on departure form, too) and does not harm you in any way.

The cap loss will be carried forward when/if you return to Canada.

nelsona non grata... and non pro

dan_tax1 · Post by **dan_tax1** » Mon Mar 21, 2005 10:23 pm

Can they tell you to be more conservative in your investments?
I'm also worried about the embarassment factor of having a big stock loss on paper.

MaggieA · Post by **MaggieA** » Mon Mar 21, 2005 11:56 pm

Dan, thanks for the smile your post brought to me. [:)]

I expect the folks at CCRA and IRS have seen much bigger losses than yours and are utterly indifferent to you as a person. It's a little bit crazy to feel embarrassed! You're just one case among zillions.