I purchased common stock while living and working in Canada. Purchase price = $35.00 US. On the day I moved to the US, the stock was worth $30.00 U.S. The stock was converted to a certificate by my Canadian trading account manager and then deposited into a US trading account. I recently sold it for $20.00 US while I am now living and working in the US.
Can I claim a capital loss on my US taxes of $10.00 / share or $15.00 / share ? What documentation is required by the IRS to claim this deduction ?
Stock purchase in Canada, sold after move to US
Moderator: Mark T Serbinski CA CPA
You are allowed to claim the entire loss: $15.00 per share, or you can choose $10.00 (which would be silly)
Note that you wer also supposed to report the deemed disposition of the stock when you left canada, and list this as one of your holdings other wise you will pay a fine.
Note too, that if the stock had been going the other way 35 to 40 to 45, you could have chosen to pay US tax $5 gain rather than $10. ($5 gain would have been reported in Canada).
Note that you wer also supposed to report the deemed disposition of the stock when you left canada, and list this as one of your holdings other wise you will pay a fine.
Note too, that if the stock had been going the other way 35 to 40 to 45, you could have chosen to pay US tax $5 gain rather than $10. ($5 gain would have been reported in Canada).
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
Thank you, that is what I thought in terms of gains and losses.
The second part of my question was what supporting documentation is required by the IRS to support my claim for the capital loss. I can prove that I owned the stock when I entered the US and the date I entered the US, and the stock price on that day. Is that all that is required ?
The second part of my question was what supporting documentation is required by the IRS to support my claim for the capital loss. I can prove that I owned the stock when I entered the US and the date I entered the US, and the stock price on that day. Is that all that is required ?
You documentation will consist of your brokergae reports from when you bought the stock, and when you sold it.
As I pointed out, the arrival date value is not important for losing stocks. You will be claiming the loss from the day you bought the stock.
For winning stocks, the value you indicated on your Cdn tax return would be the value you would keep for future reference should the IRS ever question you.
As I pointed out, the arrival date value is not important for losing stocks. You will be claiming the loss from the day you bought the stock.
For winning stocks, the value you indicated on your Cdn tax return would be the value you would keep for future reference should the IRS ever question you.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
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Mark T Serbinski CA CPA
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Let's look at the other side of this.
If a Canadian citizen lives in the U.S. and buys stock which appreciates, there is no deemed disposition on departure from the U.S. and the deemed acquisition cost base is the fair market value upon entry to Canada.
Therefore if the stock was sold at the appreciated price after moving back to Canada there would be:
a) No capital gain in the U.S. (since you are no longer taxable after moving out of the U.S.); and
b) Little or no tax in Canada, since the gain is only the difference from the value on date of entry to Canada to the sale date.
If a Canadian citizen lives in the U.S. and buys stock which appreciates, there is no deemed disposition on departure from the U.S. and the deemed acquisition cost base is the fair market value upon entry to Canada.
Therefore if the stock was sold at the appreciated price after moving back to Canada there would be:
a) No capital gain in the U.S. (since you are no longer taxable after moving out of the U.S.); and
b) Little or no tax in Canada, since the gain is only the difference from the value on date of entry to Canada to the sale date.
Mark