Have lived in Canada 2008-2015; what is my cost basis for DT

Lisa Lynch · Post by **Lisa Lynch** » Sun Feb 08, 2015 9:40 pm

Hi,

I've been teaching in Canada for 7 years. I have an apartment in Brooklyn which I purchased in 2000 and some investments. I was unaware of departure tax issues until now and am trying to school myself. I have read that "only the difference between the fair market value of capital properties owned (anywhere in the world) when leaving Canada as compared to the fair market value of capital properties owned when entering Canada is used in the capital gains calculation upon departure." Is this correct? In other words, I am only supposed to pay capital gains accrued since 2008? I'm a bit verklempt because otherwise I'll have to sell my Brooklyn apartment in order to pay capital gains, and it's supposed to be my new home!

Thanks!

nelsona · Post by **nelsona** » Tue May 05, 2015 4:45 pm

Lisa, I wish you had asked this on the tax forum.

You will not be liable for any tax on this properrty, because you (a) owned it before coming to canada and (b) you were in canada lessthan 5 years.

Such foreign property is excluded from deemed disposition rules.

nelsona · Post by **nelsona** » Tue May 05, 2015 4:47 pm

Ouch. Sorry, I missed that upu were in canada SEVEN years.
Yes you will need to pay cap gains for the 7 years worth of gains.

But, you will be allowed to also pretend to sell for US purposes, such that you will have a gain in ech country, so that you can take a credit of your Cdn retunr, and this boost the cost basis for US purposes.