Hi,
I'm Cnd landed immigrant since Nov2005 and moving to Canada this fall (permanently) after being last 6 yrs in the US on H1B. I'm wondering what is the best way of transfering my funds from US account to Canada upon my arrival? If i open a bank account and write myself a check from US account, will this be a "tax event" or how do I prove that this is the money I've had before landing?
Any info would be appreciated.
Thanks.
Moving to Canada - transferring funds
Moderator: Mark T Serbinski CA CPA
I don't know of any civilized country in the world where simply putting money in an account would be a 'taxable event.' Just what kind of system do you think we run up there?!
Open an account, write yourself a check from your US one and deposit it in your new Cdn one. There may be a hold of a couple of weeks while thecheck clears, but no probem otherwise.
Open an account, write yourself a check from your US one and deposit it in your new Cdn one. There may be a hold of a couple of weeks while thecheck clears, but no probem otherwise.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
I don't know of any civilized country in the world where simply putting money in an account would be a 'taxable event.' Just what kind of system do you think we run up there?!
Open an account, write yourself a check from your US one and deposit it in your new Cdn one. There may be a hold of a couple of weeks while thecheck clears, but no probem otherwise.
Open an account, write yourself a check from your US one and deposit it in your new Cdn one. There may be a hold of a couple of weeks while thecheck clears, but no probem otherwise.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
[quote="nelsona"]I don't know of any civilized country in the world where simply putting money in an account would be a 'taxable event.' Just what kind of system do you think we run up there?!
Open an account, write yourself a check from your US one and deposit it in your new Cdn one. There may be a hold of a couple of weeks while thecheck clears, but no probem otherwise.[/quote]
nelsona,
no need to be upset. i'm just asking a question as i'm not an expert in this topic. i heard different stories that money has to be transfered in less then 10k otherwise Cnd IRS will be on my tail. what is the period that is still considered as "safe" to transfer my funds? is it 1 day, 1 week or 1 month? sorry if my questions sound too stupid.
Open an account, write yourself a check from your US one and deposit it in your new Cdn one. There may be a hold of a couple of weeks while thecheck clears, but no probem otherwise.[/quote]
nelsona,
no need to be upset. i'm just asking a question as i'm not an expert in this topic. i heard different stories that money has to be transfered in less then 10k otherwise Cnd IRS will be on my tail. what is the period that is still considered as "safe" to transfer my funds? is it 1 day, 1 week or 1 month? sorry if my questions sound too stupid.
Bank transactions are already monitored, so bank-to-bank transcation is not subject to anything special. It is hauling of large amounts of cash across the borders that is subject to reporting (but never taxation).
And he US treasury has exactly the same poilicies.
I have no idea what your question about when it is "safe" to transfer your money. It is ALWAYS safe. This is not Nigeria.
Again, what other strange notions do you have about the banking/financial/taxation sytsem of canada?
And he US treasury has exactly the same poilicies.
I have no idea what your question about when it is "safe" to transfer your money. It is ALWAYS safe. This is not Nigeria.
Again, what other strange notions do you have about the banking/financial/taxation sytsem of canada?
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
[quote]I have no idea what your question about when it is "safe" to transfer your money ...
Again, what other strange notions do you have about the banking/financial/taxation sytsem of canada?[/quote]
Well, the question about "safety" was really about the following scenario(maybe i'm overthinking this too much...): When I move to Canada and transfer my assets from US bank to my Canadian accnt it is obviously "safe". But then, say a month later, some of my stocks in the US earned dividends or some CD matured and earned interest. If I transfer this amount to Canada wouldn't it be considered as "revenue" for tax purposes? Yes, it was my money, but it has partially interest that was earned after I became officially "resident with ties in Canada" (this is another thing I heard is important to taxation) and therefore is subject to tax in Canada.
Another one, but this one I totally understand, is Canada taxes take into account my WW income, so any money earned outside of Canada (i.e. US stocks, CDs, mutual funds, etc...) will be subject to tax.
when I land this fall and submit tax return in Canada, it has to include income from the US this year. Therefore, after paying US taxes I'll have to add the difference to Cnd tax (partial? from the date of landing till end of year).
Again, what other strange notions do you have about the banking/financial/taxation sytsem of canada?[/quote]
Well, the question about "safety" was really about the following scenario(maybe i'm overthinking this too much...): When I move to Canada and transfer my assets from US bank to my Canadian accnt it is obviously "safe". But then, say a month later, some of my stocks in the US earned dividends or some CD matured and earned interest. If I transfer this amount to Canada wouldn't it be considered as "revenue" for tax purposes? Yes, it was my money, but it has partially interest that was earned after I became officially "resident with ties in Canada" (this is another thing I heard is important to taxation) and therefore is subject to tax in Canada.
Another one, but this one I totally understand, is Canada taxes take into account my WW income, so any money earned outside of Canada (i.e. US stocks, CDs, mutual funds, etc...) will be subject to tax.
when I land this fall and submit tax return in Canada, it has to include income from the US this year. Therefore, after paying US taxes I'll have to add the difference to Cnd tax (partial? from the date of landing till end of year).
ah, Now you are starting to make some sense.
Canada will tax you on 2 things: ANY CDn source money you earned before arriving, and ANY money earned anywhere after arriving.
So, Us interst and dividends earned before arrival in canada. and ANY capgains ( or losses) accrued before arrival will not be taxed by Canada.
So, in the scenario you desribe, it quite simply doesn't maktter where the money is deposited, what matters us whether you are a Cdn resident when the money is earned. You dividentd or interst will be taxable in Canada becuae you reside there, not because you 'brought the money' to Canada.
All your investments are 'sold and bought' on the date you arrive in Canada (for Cdn tax purposes only), so you might want to trigger any cap losses before you arrive, as they won't be much good to you after. You don't need to trigger any cap gains, as these will be 'zeroed' for Cdn purposes when you arrive.
Remember, "arriving" means becoming a Cdbntax resident. which only occurs when you actuallt get a place to live, not neeessarily when you 'land'. Many landed immigrants in Canada have not spent more than a week or two in Canada, and thus are still not tax residents there, upto 3 years cafter landing.
Canada will tax you on 2 things: ANY CDn source money you earned before arriving, and ANY money earned anywhere after arriving.
So, Us interst and dividends earned before arrival in canada. and ANY capgains ( or losses) accrued before arrival will not be taxed by Canada.
So, in the scenario you desribe, it quite simply doesn't maktter where the money is deposited, what matters us whether you are a Cdn resident when the money is earned. You dividentd or interst will be taxable in Canada becuae you reside there, not because you 'brought the money' to Canada.
All your investments are 'sold and bought' on the date you arrive in Canada (for Cdn tax purposes only), so you might want to trigger any cap losses before you arrive, as they won't be much good to you after. You don't need to trigger any cap gains, as these will be 'zeroed' for Cdn purposes when you arrive.
Remember, "arriving" means becoming a Cdbntax resident. which only occurs when you actuallt get a place to live, not neeessarily when you 'land'. Many landed immigrants in Canada have not spent more than a week or two in Canada, and thus are still not tax residents there, upto 3 years cafter landing.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
That's exactly my situation. I've landed in '05 but didn't move permanently yet...moving soon.
A quick question on your stmnt below:
[quote="nelsona"]All your investments are 'sold and bought' on the date you arrive in Canada (for Cdn tax purposes only), so you might want to trigger any cap losses before you arrive, as they won't be much good to you after. You don't need to trigger any cap gains, as these will be 'zeroed' for Cdn purposes when you arrive.[/quote]
So, it is advised to sell/exercise outstanding options/stock/etc... before arriving to Canada, right? Even if it generates loss. Hmm... what if I wait for the stock to go up and then sell it while in Canada? what should be reported in US and Canada tax return even if I still at loss?
Thanks.
A quick question on your stmnt below:
[quote="nelsona"]All your investments are 'sold and bought' on the date you arrive in Canada (for Cdn tax purposes only), so you might want to trigger any cap losses before you arrive, as they won't be much good to you after. You don't need to trigger any cap gains, as these will be 'zeroed' for Cdn purposes when you arrive.[/quote]
So, it is advised to sell/exercise outstanding options/stock/etc... before arriving to Canada, right? Even if it generates loss. Hmm... what if I wait for the stock to go up and then sell it while in Canada? what should be reported in US and Canada tax return even if I still at loss?
Thanks.
Your tax situation in US will not change with the move; you will be taxed as before.
In canada, taxation of options is not as in US, so you *might* want to exercise the options before coming up. In Canada exercising an option is treated like salary income.
As to any investments you have on the day you move, in canada they will take on a new cost basis, based on value that day, in US they will remain unchanged.
So a stock that you have lost on before coming up will not generate you any cap losses in canada when you sell, whaile it will in US, so you won't be able to easily meld the tax you pay in Canada with the tax you pay in US (since you will have none). best to sell losers before coming up.
In canada, taxation of options is not as in US, so you *might* want to exercise the options before coming up. In Canada exercising an option is treated like salary income.
As to any investments you have on the day you move, in canada they will take on a new cost basis, based on value that day, in US they will remain unchanged.
So a stock that you have lost on before coming up will not generate you any cap losses in canada when you sell, whaile it will in US, so you won't be able to easily meld the tax you pay in Canada with the tax you pay in US (since you will have none). best to sell losers before coming up.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
Thanks for clarifying this for me. Basically, regardless of the sell/exercise outcome i have to report it in Cdn tax return, and not when money is transfered to a Cdn account. Correct? Would i have to report that in US tax return as well after not being there for full year (assuming i keep using US brokerage account)? If answer is yes, then i have to deal with 2 tax returns!? which could probably result in max taxation anyway... argh...
In the year you leave US, you will most likely benefit from filing as a full year resident, so this would mean reporting everything for that year, before and after move.
In Canada you have no choice, you ONLY report income AFTER the move, so get as much US income paid to you before moving, as this will lessen your Cdn reportable income.
In Canada you have no choice, you ONLY report income AFTER the move, so get as much US income paid to you before moving, as this will lessen your Cdn reportable income.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best