Canadian source Capital Gains and TN visa

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derochiegreen
Posts: 2
Joined: Fri Jul 29, 2022 12:32 pm

Canadian source Capital Gains and TN visa

Post by derochiegreen »

Hello,
I am looking at accepting a role in the US on a TN visa, however I have the added wrinkle of being a CCPC shareholder that is undergoing a sales process leading to a capital gain of around $750k CAD. Assume the CCPC Capital gain exemption holds. I am curious about the implications of this gain if a)the transaction happens in the 1st Qtr of next year and I was to accept the TN Visa role in the first half of the year as well. I am aware of the substantial presence test and wondered would the Canadian gain be then taxable in the US as I would be present for more than 182 days. If so, is the simplest way to avoid the US taxation to not accept any US work visa role until the second half of the year to avoid the substantial presence test?
Thanks.
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Canadian source Capital Gains and TN visa

Post by nelsona »

As a Cdn, you have the treaty benefit of retaining US non-residence until you break CDn tax residency, regardless of the SPT. Days don;t really come into play for Cdns, while they maintain true Cdn tax residency. Only after leaving does one possibly become US tax resident. There is lots of info on this forum regarding taxes for the moving year .

So, simply be sure to collapse your CCPC before leaving Canada, even if it is only the day before. There would be (complicated) ways of minimizing or eliminating any US tax that might arise if collapsed after becoming a US tax resident, but given your advanced knowledge, you should be able to accomplish this before leaving.

The safest would be to do so during THIS tax year, as this would give you greater flexibility in how you file in US next year. when you do move, but doing so before your move is fine.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
derochiegreen
Posts: 2
Joined: Fri Jul 29, 2022 12:32 pm

Re: Canadian source Capital Gains and TN visa

Post by derochiegreen »

Thank you very much for your reply. That helps me to better focus my search here.
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