US Citizen married to Canadian

taraB · Post by **taraB** » Thu Apr 03, 2008 9:42 pm

Don't give up on me yet, I almost understand it (I think).

My understanding was that the deemed dispo taxes are paid to Canada upon leaving the country and at that time I haven't sold assets in the States to incur a cap gains tax therefore why would I get a US tax credit? The dispo tax could have been based solely on the CND getting weak during my stay in Canada and not an increase in the asset's value in US dollars.

What am I missing?

An example:

a. In 2008 I own 1000 shares of IBM worth 100,000 CND and 100,000 USD (assume par). $100/per share in both CND and USD.

b. IN 2012 I decide to move back to the US and IBM is trading at $100 USD per share. And IBM is trading at $150 CND.

c. I enter the US and trigger a deemed dispo of 50,000 cap gains that Canada is owed. I haven't sold anything and my IBM shares are still worth the same price in USD that they were in 2008. I would get a tax credit for this?

I know you are quitting these questions...this is my last one. Thanks again.

taraB · Post by **taraB** » Thu Apr 03, 2008 9:44 pm

Sorry, assume this is after the 60 months protection period. Say i left in 2013 or later

nelsona · Post by **nelsona** » Thu Apr 03, 2008 11:03 pm

Your scenario is correct. In the eyes of Canada, you have gained.

had you been in canada the last 3 years, the reverse would have been true: no gain in canada and whopping cap gain in US.

That is the 'risk/reward' from holding foreign assets.

I think we'll drop it now.