Please advise what are my options if I plan to move back to Canada with my brokerage account. My portfolio is about 40% down and if I move back to canada do I have to liquidate everything and take losses ?
I have account with TD Amerutrade. Can I transfer it to Canada and keep my portfolio intact with hope it will recover one day ?
what happens to my 401K account ? Can I keep it or I have to liquidate that too ?
Please advise.
What happens to Brokerage Account if I move back to canada
Moderator: Mark T Serbinski CA CPA
You should not use a US BROKERAGE account once you return to canada. If you don't want to sell, you can transfer stocks to a Cdn broker. This can be done p[retty essily between ANY two brokerages, it doesn't have to be two with the same mix of letters in their names. Mutual funds however, are not transferable to cross-border, so the best you could probanly do is sell them and buy similar funds in Canada. Unfortunately the capital losses this would generate would likely be lost to you after the year of move.
as to your SHELTERED accounts, you can keep these in US, prroblem being that many 401(K) firm will not want to keep you as a client. You would need to secure a willing brokerage before leaving US, or somehow keep a US address active. This applies to RETIREMENT accounts. Ordinary investment accounts should be wound down, as imentionned above.
There are a couple of firm (Blackmont is one) that deal successfully with these (by licensing themselves in both countries) but you need a pretty large portfolio to be accepted a s a client (like >$250K)
as to your SHELTERED accounts, you can keep these in US, prroblem being that many 401(K) firm will not want to keep you as a client. You would need to secure a willing brokerage before leaving US, or somehow keep a US address active. This applies to RETIREMENT accounts. Ordinary investment accounts should be wound down, as imentionned above.
There are a couple of firm (Blackmont is one) that deal successfully with these (by licensing themselves in both countries) but you need a pretty large portfolio to be accepted a s a client (like >$250K)
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
In general though, this is a BAD time for you to be moving back to canada for the taxation of your non-sheltered investments.
as I said, all you cap losses (whether you sell or not) are not going to be of any use to you since they would only be used on a US return against other gains, and you won't be filing in US after you move.
And the day you return to canada, your investment take on a new cost basis on that day. This means that you will be on the hook in Canad for all the gains from your current low position, not when you origianlly bought.
So, if you are planning to move back in 2009, I would at least be selling enough losers now to get my $3000 cap loss for 2008 and probably the $3000 for next year too, even if it just means switching a couple of funds into similar stock vehicles.
as I said, all you cap losses (whether you sell or not) are not going to be of any use to you since they would only be used on a US return against other gains, and you won't be filing in US after you move.
And the day you return to canada, your investment take on a new cost basis on that day. This means that you will be on the hook in Canad for all the gains from your current low position, not when you origianlly bought.
So, if you are planning to move back in 2009, I would at least be selling enough losers now to get my $3000 cap loss for 2008 and probably the $3000 for next year too, even if it just means switching a couple of funds into similar stock vehicles.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Given your goals to leave US, I would definitely be maxxing out my cap losses to take full advantage of the yearly allowable loss before leaving.
Remember, the same ruiles that would make you loose your losses when leaving can also be used to shelter your gains when leaving.
So, moving around all losers now may eventually allow you to take back investments to Canada with no cap gain in either US or Canada.
Remember, the same ruiles that would make you loose your losses when leaving can also be used to shelter your gains when leaving.
So, moving around all losers now may eventually allow you to take back investments to Canada with no cap gain in either US or Canada.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
"You should not use a US BROKERAGE account once you return to Canada... as to your SHELTERED accounts, you can keep these in US... You would need to secure a willing brokerage before leaving US, or somehow keep a US address active. This applies to RETIREMENT accounts. Ordinary investment accounts should be wound down, as i mentioned above."
Hi Nelsona,
A couple questions for clarification:
1) Do you really have to "wind down" a non-retirement brokerage account or is the rule that you are no longer supposed to buy in that account? For example, if you had a brokerage account where you were happy with the investments, couldn't you just leave the account open and sell as needed?
2) How long do you have to "wind down" your account? Is there a serious penalty or are you okay so long as it's done before getting "caught"?
3) For US retirement accounts, are there any restrictions on trading by a Canadian resident (assuming it was set up before departing)? e.g. Do you need to deal with a US brokerage representative that is licensed in Canada?
4) Do any of the above answers differ when the Canadian citizen/resident is also a US citizen?
Thank you!
Hi Nelsona,
A couple questions for clarification:
1) Do you really have to "wind down" a non-retirement brokerage account or is the rule that you are no longer supposed to buy in that account? For example, if you had a brokerage account where you were happy with the investments, couldn't you just leave the account open and sell as needed?
2) How long do you have to "wind down" your account? Is there a serious penalty or are you okay so long as it's done before getting "caught"?
3) For US retirement accounts, are there any restrictions on trading by a Canadian resident (assuming it was set up before departing)? e.g. Do you need to deal with a US brokerage representative that is licensed in Canada?
4) Do any of the above answers differ when the Canadian citizen/resident is also a US citizen?
Thank you!
1). You may not BUY anything in the account, so you could technically hold it without buying. Howevver, your broker will at some point likely FORCE you to sell, which may not be at ta time that you wish it. Also, some brokers view re-invested distributions as a BUY, so will insist that you move it.
We are talking mutual funds here of course, since all stocks can be transfered withoutr problem and should be transferred as soon as practical.
2). See 1.
3). There does not appear to be as onereous restrictions from the province as tehre was for each state. Remember that the SEC bought of on all this years ago and it took the STATES all that time to regulate. There does not appear to be that issue in canada. However most US brokers will not deal. with a Cdn adress period.
4. No. Residence is the key factor.
There are now firms that deal cross-border for sufficiently wealthy clients (blackmont is one).
We are talking mutual funds here of course, since all stocks can be transfered withoutr problem and should be transferred as soon as practical.
2). See 1.
3). There does not appear to be as onereous restrictions from the province as tehre was for each state. Remember that the SEC bought of on all this years ago and it took the STATES all that time to regulate. There does not appear to be that issue in canada. However most US brokers will not deal. with a Cdn adress period.
4. No. Residence is the key factor.
There are now firms that deal cross-border for sufficiently wealthy clients (blackmont is one).
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing