Tax filing for stock sale and deemed disposition

[canuckmom]

We had some stock that we paid deemed disposition taxes to the Cdn gov't when we became non resident at the end of 2006. We sold those stocks in the US in 2007.

How do we file so we don't end up paying taxes twice?

[nelsona]

the stocks have new cost basis based on the price you deemed them at in 2006. They would still be long-term, if you held for more than a year.

[canuckmom]

Thank you. They were bought between 97 and 99 while living in the the US. ETrade transferred them to Canada in 2002.

When we did taxes last year, the the deemed disposition value was based on the difference between our departure date and value at the date of landing in Canada.

They were transferred from Canada last year and later sold, and the papers from US tax we received show 0 for cost basis and 0 for realized gain/loss, but there are some figures for reporting on IRS boxes (1a, 1b, 2a, 2b) Should we use those?

So would the idea now be to claim the difference between the value they were actually sold at and the deemed disposition value? Or do we pay adjusted capital gains taxes to the US that reflects our already paid our deemed capital gain? Or should we file, pay full capital gains taxes to the US and claim back some from Canada? Which forms would one use to file this?


:roll:

[nelsona]

I already answerd you. the cost basis of the staock, for the purposes of US tax, is the deemd disposition price.