Moving to the US- Can I avoid paying taxes on my US investments?

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apkesh
Posts: 8
Joined: Mon Jan 26, 2009 10:33 am

Moving to the US- Can I avoid paying taxes on my US investments?

Post by apkesh »

Hi, I am a resident of Canada and plan to move to the US end of the year. At some point after moving to the US, we plan to severe ties with Canada for tax reasons. During this process, Canada will tax us not only on your investments in Canada, but apparently, also on your foreign investments.

I have an investment property in Florida that has appreciated quite well since i purchased it 15 years ago. I am looking to see if there are ways to mitigate paying taxes on this property. One idea I have is to move the property to an LLC , but not sure if that would help. Any other ideas you can think of, please share.
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Moving to the US- Can I avoid paying taxes on my US investments?

Post by nelsona »

FYI, your move WILL be your date of departure, not some date thereafter. Cdn real property will NOT be subject departure tax, but all else will.
You can defer the tax by election and posting security. Generally the property itself is used as security, but you will at some point owe the tax on the gains you made while a Cn resident.It is what you owe after all.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
apkesh
Posts: 8
Joined: Mon Jan 26, 2009 10:33 am

Re: Moving to the US- Can I avoid paying taxes on my US investments?

Post by apkesh »

Thank you Nelson. From your response, it sounds like there isn't a way around this then? Since we have not technically sold the US property, I was hoping there was some way to mitigate the exposure. I guess we'll just have to accept it.
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Moving to the US- Can I avoid paying taxes on my US investments?

Post by nelsona »

As I said, you can delay the payemt.
One other legal way id to defer payment, and then hold the property for 10 more years (while in US). That will avoid Cdn departure tax on that investment.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
worryfreeinvestor
Posts: 145
Joined: Thu Mar 24, 2005 6:17 pm
Location: Seattle, WA

Re: Moving to the US- Can I avoid paying taxes on my US investments?

Post by worryfreeinvestor »

This is very timely because my father just died. He was a Canadian citizen and Canadian resident who owned a condo in Florida through an LLC. He formed the LLC and bought the condo in 1999. My brother and I are his heirs. I am a US citizen and resident and my brother is a British citizen and resident. We will likely sell the condo. Will my father's estate owe capital gains taxes in Canada? What is the US tax exposure? If there is capital gains tax due can we do something clever by arbitraging my US citizenship or my brother's British citizenship?

(I know he paid property taxes to the county in Florida. He earned rental income when he did not live in the condo as a snowbird. I believe the LLC passed that income through as a C Corp and he reported it on his Canadian personal income tax, but I have not yet discovered the truth of that.) Any advice gratefully accepted.
apkesh
Posts: 8
Joined: Mon Jan 26, 2009 10:33 am

Re: Moving to the US- Can I avoid paying taxes on my US investments?

Post by apkesh »

from all the reading we've done, it looks like there is no way around it. However there are some differences between your situation and mine. Your father's condo was registered under an LLC where as mine is registered under my name. Also, since your dad passed away and you both have inherited the place, you may want to check how taxes on inherited properties work.
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