elect a deemed disposition on emigration?

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elect a deemed disposition on emigration?

Post by bwafusion »

Emigrated from Canada to the US September 2022 and, of course, the deemed disposition rules apply (Forms 1243 and 1161). At the time of emigration I held only one asset (foreign in the US) to which the rule would apply. (All other assets had been capitalized before departure -- the remaining asset has a gain to report.) It is my understanding that if I have a loss in a property that is NOT subject to the deemed disposition rules (e.g. a loss within an RRSP) then it is possible to make an election for a deemed disposition of said property and thus offset the reported gain on Form 1243 for the other asset. Is this correct? If yes, how would I make the election? thanks
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Re: elect a deemed disposition on emigration?

Post by nelsona »


The election is intended for the specific list of items which are exempt from deemed disposition that can produce future Canadian capital gains. If you carefully read the instructions on form T1243, you will see that the election is limited only to the following investments:
1) Canadian real or immovable property, Canadian resource property, and timber resource property
2) Canadian business property (including inventory) if business is carried on through a permanent establishment in Canada

RRSP income is considered ordinary pension income, both in Canada and, by treaty, in the US -- not capital gains,

Keep a record of the book value of your RRSP assets (rather than the fair market value) on the day you left, that portion will not be taxed in US should you take money from your RRSP while in US.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
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