In June of 2006 I became a non-resident of Canada. I completed the appropriate forms to notify Canada Revenue Agency of my non-resident status. I moved to eastern Europe and was retired. I was and still am a citizen of Canada.
Prior to leaving Canada I sold all my Canadian assets (real estate, car) and then moved everything to a brokerage account of an American firm and this firm held their assets at an American bank. However, since I was neither a resident of Canada or USA they instructed me to open my account through the UK division of this firm.
In Canada I still had/have bank accounts, a credit card, locked-in RRSP, some furniture stored, and a self-directed RRSP (but most of the funds were transferred out of the bank accounts and self-directed RRSP to the above-mentioned brokerage firm). My parents, brothers and sisters are all living in Canada. I have not returned to Canada since June 2006.
Between autumn 2007 and autumn 2008, during the height of the financial crisis, I lost almost all of the money I had in my account at the brokerage firm. The original amount was in 7 figures and now only a few thousand dollars remain. So it is a 7 figure capital loss.
As far as the loss of the 7 figure amount at the brokerage firm, I am resigned to the fact that is gone and there is no way to get it back. I am now no longer retired and need to return to Canada to start building my wealth again. The capital losses are useless for tax purposes where I am currently residing.
So my questions is, is there any way in this disaster to at least have my capital losses recognized as capital losses for Canadian tax purposes so that (hopefully) when I have capital gains again in Canada I can write them off against these capital losses? As far as I understand, as a non-resident of Canada I cannot do this.
I have not filed a Canadian tax return since the 2006 tax year.
Ie. Any opinions what Canada Revenue Agency would think/do if I filed my 2007 and 2008 returns saying I was a resident of Canada from autumn of 2007, declaring a 6 figure capital loss and no income? Any chance of success or it is a double disaster?
Any advice appreciated, I have nothing to lose at this point.
Canada, Capital Losses & Resident/Non-resident, please h
Moderator: Mark T Serbinski CA CPA
The only way to possibly get some relief is on investments you held at the time you left canada, and still hold these when you return.
It might be possible to 'undo' the deemed disposition (and later deemed acqusisition when you returned). But investments that you either bought or sold while non-resident are not eligible for this treatment.
It might be possible to 'undo' the deemed disposition (and later deemed acqusisition when you returned). But investments that you either bought or sold while non-resident are not eligible for this treatment.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
Nelsona
I appreciate your reply. In my case I had no deemed dispositions, it was all cash that I transferred to the brokerage.
I wasnt suggesting that I try to pretend I did not become non-resident. I filed with Canada revenue indicating I was nonresident in June 2006. What I was asking is, since I have not filed 2007 and 2008 canadian tax returns, what if I file saying that I became resident of Canada again in 2007 BEFORE I incurred my capital losses? Does anyone think I have ANY chance of that?
Any other suggestions, legal or otherwise I would appreciate. As I said before, I have nothing to lose at this point as I have no assets.
I appreciate your reply. In my case I had no deemed dispositions, it was all cash that I transferred to the brokerage.
I wasnt suggesting that I try to pretend I did not become non-resident. I filed with Canada revenue indicating I was nonresident in June 2006. What I was asking is, since I have not filed 2007 and 2008 canadian tax returns, what if I file saying that I became resident of Canada again in 2007 BEFORE I incurred my capital losses? Does anyone think I have ANY chance of that?
Any other suggestions, legal or otherwise I would appreciate. As I said before, I have nothing to lose at this point as I have no assets.
Because, in the situation you describe, that would be a lie. You sign your return saying that you are not lying.
If you had made a million, we wouldn;t be having this dialogue now would we?
Since you were not resident in 2007 or 2008, you were supposed to file a return -- and you didn't.
Sorry.
If you had made a million, we wouldn;t be having this dialogue now would we?
Since you were not resident in 2007 or 2008, you were supposed to file a return -- and you didn't.
Sorry.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Nelsona
“Because, in the situation you describe, that would be a lie. You sign your return saying that you are not lying.
If you had made a million, we wouldn’t be having this dialogue now would we?â€
You just stated the obvious. That is not advice and you did not answer the question that I asked.
Again, my question is, given my situation what kind of chance do I have of filing as a resident for 2007 and 2008 and declaring my capital losses? (n.b. As a resident with no income for those years it would have been optional for me to file a return).
Yes, it is a lie. Would all people who have never lied please let me know. As I said, I have almost no income or assets at this time so have nothing to lose.
“Since you were not resident in 2007 or 2008, you were supposed to file a return -- and you didn't.â€
As far as I know a non-resident does not have to file a return unless they have Canadian source income
AND
a resident who does not have any income also does not have to file a return (they can choose too if they want to claim credits or, as in my case, declare capital losses).
If there is any knowledgeable person out there who understands my question and can give me some advice I would greatly appreciate it.
“Because, in the situation you describe, that would be a lie. You sign your return saying that you are not lying.
If you had made a million, we wouldn’t be having this dialogue now would we?â€
You just stated the obvious. That is not advice and you did not answer the question that I asked.
Again, my question is, given my situation what kind of chance do I have of filing as a resident for 2007 and 2008 and declaring my capital losses? (n.b. As a resident with no income for those years it would have been optional for me to file a return).
Yes, it is a lie. Would all people who have never lied please let me know. As I said, I have almost no income or assets at this time so have nothing to lose.
“Since you were not resident in 2007 or 2008, you were supposed to file a return -- and you didn't.â€
As far as I know a non-resident does not have to file a return unless they have Canadian source income
AND
a resident who does not have any income also does not have to file a return (they can choose too if they want to claim credits or, as in my case, declare capital losses).
If there is any knowledgeable person out there who understands my question and can give me some advice I would greatly appreciate it.
You have my answer, take it as advice or don't.
Your response would seem to indicate that you are looking for someone to agree with you, rather than someone "knowledgeable". No knowledgeable person would suggest lying on a tax return, now would they?
But for agreements sake, yes, If you have a printer and paper you can file a 2007 and 2008 tax return.
Your response would seem to indicate that you are looking for someone to agree with you, rather than someone "knowledgeable". No knowledgeable person would suggest lying on a tax return, now would they?
But for agreements sake, yes, If you have a printer and paper you can file a 2007 and 2008 tax return.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Come on, are you telling me you think the accountants that advised Enron and are advising many other US and Canadian companies to push the envelope to the edge and beyond are not knowledgable?
And yes some of them got caught lying, but if you think there are not many more that did not get caught lying then you are living in fantasy land.
I still would appreciate an answer to my question from any "open box" thinkers who understands my question and can give me some advice.
My question:
Given my situation (I still had some ties to Canada, as I indicated above, that I could prove), is there any chance I could file as a resident for 2007 and 2008 (before I incurred my capital losses) and not raise any red flags?
If there is a chance, any particular way I should file my returns so as to maximize the chance I do not raise any red flags?
And yes some of them got caught lying, but if you think there are not many more that did not get caught lying then you are living in fantasy land.
I still would appreciate an answer to my question from any "open box" thinkers who understands my question and can give me some advice.
My question:
Given my situation (I still had some ties to Canada, as I indicated above, that I could prove), is there any chance I could file as a resident for 2007 and 2008 (before I incurred my capital losses) and not raise any red flags?
If there is a chance, any particular way I should file my returns so as to maximize the chance I do not raise any red flags?