I moved to the US from Canada in 2021 and at that time, I owned some stocks and digital assets. As a result, I was subject to deemed disposition rules and paid the appropriate tax to the CRA.
I became a US tax resident in 2022. I sold some of these stocks in 2023 and I now need to report the gain or loss to the IRS. I assume I need to use Form 8833 to take a treaty based position as per https://www.irs.gov/pub/irs-drop/rp-10-19.pdf to account for my adjusted basis. However, reading that makes me feel like I should have filed Form 8833 in my first year as a US tax resident.
1. When am I supposed to file Form 8833 (Treaty based return position disclosure)?
2. Which article of the treaty am I supposed to use in this disclosure?
Thank you.
When To Report Form 8833 To IRS
Moderator: Mark T Serbinski CA CPA
Re: When To Report Form 8833 To IRS
1. It should have been included on your 2021 1040 (if you chose to file a 1040 that year), or definitely on 2022 return.
2. As the Rev Proc points out, the treaty article is XIII(7).
2. As the Rev Proc points out, the treaty article is XIII(7).
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Re: When To Report Form 8833 To IRS
Thank you for the response, Nelsona. I filed a 1040 for the first time in 2022 so I guess it should have been included then. I used an accountant to file my taxes in 2022 and had given him this information but I am unsure as to whether he filed it. Do you know if I can amend my 2022 return to file this form Thank you again for your help.
Re: When To Report Form 8833 To IRS
Seems like there's a penalty of $1000 for failing to file this form on time so I will have to lay out all the facts in my amended return
Re: When To Report Form 8833 To IRS
the penalty for not filing 8833 is only for a very limited types of elections, which this isn't one of them.
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