Types of Investing Accounts to Keep or Close

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Joined: Thu Mar 02, 2023 9:37 am

Types of Investing Accounts to Keep or Close

Post by V2021 »


This is a two-part question.

I am in the process of moving from Canada to USA and based of my research and a consultation I am liquidating and closing up many of my investment accounts and will re-invest in USA after I move there.

First question:

I have read that certain accounts have additional reporting requirements in the US. Where I am confused is whether they still have reporting requirements if the balance is $0.

I currently have in Canada:

Margin Investment - Liquidated/Empty.
Cash/Personal Investment - Liquidated/Empty.
USD TFSA - Liquidated/Empty.
CAD TFSA - Mostly liquidated
USD RRSP - Empty.
CAD RRSP - Intact.
TFSA Savings - Empty.
Regular Savings - Empty.

Through a consultation and online research it seems keeping my RRSP makes sense. But for the other accounts (Margin, Cash, Savings and TFSA), do the accounts need to be closed in order to avoid additional reporting/tax paperwork in the US, or just having a $0 balance is fine? I am okay closing them if needed.

Second question:

The CAD TFSA holds only 4 securities (dividend paying stocks) with quite heavy losses. I am personally okay holding onto those 4 Canadian Stocks for a couple months (no ETFs, no mutual funds, no REITs, etc.) because I do believe they will recover (unpredictable, but I would have kept them if I could keep all my investments). When I look at the potential cost of filing forms to hold onto that 1 investment account while living in the US, it makes sense to keep the CAD TFSA, let it recover, then sell and close the account at a later date and just pay the fees during tax time.

The question is, if I sell those 4 securities in the next 3 months, while being a US resident and then close my TFSA at that time, how does reporting for that account work in the US? Does it still need to be reported if it was active for a few months when first moving to the US or since it no longer exists at year-end/during tax time, it doesn't need to be reported? If it does, does it only need to be reported for the 2023 year, and no longer for the 2024 year since it was liquidated and closed in 2023?

Thank you.
Posts: 13
Joined: Thu Jun 25, 2020 6:34 pm

Re: Types of Investing Accounts to Keep or Close

Post by Cdninga »

Here is the link to the FBAR section of the IRS website.

https://www.irs.gov/businesses/small-bu ... ounts-fbar

Who Must File

A U.S. person, including a citizen, resident, corporation, partnership, limited liability company, trust and estate, must file an FBAR to report:

a financial interest in or signature or other authority over at least one financial account located outside the United States if
the aggregate value of those foreign financial accounts exceeded $10,000 at any time during the calendar year reported.

I believe that you would have signature authority over an account even if it is empty but not closed and therefore would need to file the FBAR annually.
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