Greetings,
Is it advisable for tax considerations to cash in U.S. Savings Bonds before landing in Canada? I have a number with considerable interest that will be taxable when they are cashed, and would like to know the best way to proceed with them.
Many thanks,
Shylee
U.S. Savings Bonds query
Moderator: Mark T Serbinski CA CPA
In Canda,intrst is taxable on an accrued basis, so despite the fact that you have not collected any interest for several years, Canad wil only tax you on the portio you earn after you become resident, year by year, regardless of whether you receive it or not. So holding the bonds until after you leave has no adverse result in Canada.
For US tax treatment thenswer varies slightly depending on whether you are a US citizen or Green crad holder, or whether you are not.
If you are a USC, it matters little if you cash them early as the tax will be due on your 1040 in the year you get it.
If however, you are not a US citizen or GC holder, your US bond interset becomes tax-free in US after you leave, so yo would DEFINITELY hold onto it until after becoming Cdn resident.
For US tax treatment thenswer varies slightly depending on whether you are a US citizen or Green crad holder, or whether you are not.
If you are a USC, it matters little if you cash them early as the tax will be due on your 1040 in the year you get it.
If however, you are not a US citizen or GC holder, your US bond interset becomes tax-free in US after you leave, so yo would DEFINITELY hold onto it until after becoming Cdn resident.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best