Sorry for the long post. I am just trying to make sure I am clear on everything.
I am about to move to US. After searching different websites and reading many of the posts online, I 'think' I kind of have an idea of what I need to do.
The following are all my properties that I think matter to the tax and moving:
1. RRSP: $25K
2. DPSP: $5K
3. Car: $2K
4. ESPP stock: $13K (current market value)
5. RSU(restricted stock unit): $5K (current market value)
6. $2K profit on employee stock options excised Dec. of 2007
If I don't sell the stock before I move to US, what I think I will need to do:
For CRA 2008 tax return (filed in 2009):
1. In T1161, I only need to list car($20K) and stock($18K).
2. In T1243, I need to calculate the gain/loss of the stocks.
3. In T3, I should include the gain/loss calculated from T1243
4. In T3, I should include 50% * $2K as the gain of excising the employee stock options.
5. I can choose to defer the tax by submitting T1244.
For US 2008 tax return (filed in 2009)
1. In 8891, report the RRSP internal earning
2. In 1116, claim tax paied to CRA as tax credit
3. If I sell the stocks in US in 2008, I shall use the deemed disposition value as the base to calculate the gain/loss.
If I do sell the stock before I move
For CRA 2008 tax return, I don't need to include the stocks in T1243 since the stocks are already sold when I move. I still need to include the gain/loss from selling the stocks in T3 though.
As to how to calculate the gain/loss from selling the stocks.
1. For $13K stocks bought via ESPP, the gain/loss is
((current market price) - (full marked price when the stocks are bought))* ( number of shares)
2. For RSU, the gain/loss is
( (current market price) - 0 ) * ( number of shares)
I have 2 more questions:
1. When calculating the gain/loss from selling the ESPP stocks, can i convert all the price into CAD? With ESPP, the CAD was deducted from my pay check every 2 weeks and one CAD was only worth about 0.7-0.8 USD.
2. If the stock I hold are from the a US based company listed in NASDAQ, can I still only claim 50% of the gain from excising the stock option?
Really appreciate any suggestions. Feel free to point out if you think anything I mention is not right.
Thanks a lot
Moving to US: tax, stocks, ESPP, RRSP, stock option, etc.
Moderator: Mark T Serbinski CA CPA
Let's see...
1 and 2. Your RRSP and DPSP are pensions. Nothing to report in Canada upon departure
3. Car. nothing to report to canada due to low value.
4. ESPP. Since this seems to be just stock that you have purchased, you do have to report its existence and calculate gain/loss on departure if you still own it when you leave. The costs are determined by what you paid (in C$) for this stock over the years. The FMV (also in $Cdn) will determine your deemed gain/loss.
5. Unless you have exercised the RSU, there should be nothing to report yet, since it is not 'yours'. Once you exercise, it will be treated under the current options rules
6. The exercise you did make will be reported on your 2007 return as wages. They are now 'yours' and are treated like any other stock, with the cost being what was included in your wages.
Assuming you meant schedule 3 whgere you say T3, your deemed disposition would go on next years schedule 3. as to your exercise of your RSU, unless you sold, there is nothing to report on Sched 3. The exercise should be wages, no? Once you sell, then you will have a gain/oss. If you exercised AND sold at the same time, you would have a zero gain on sched 3. And remember, that happened in 2007, so would not impact your 2008 dperture return.
1 and 2. Your RRSP and DPSP are pensions. Nothing to report in Canada upon departure
3. Car. nothing to report to canada due to low value.
4. ESPP. Since this seems to be just stock that you have purchased, you do have to report its existence and calculate gain/loss on departure if you still own it when you leave. The costs are determined by what you paid (in C$) for this stock over the years. The FMV (also in $Cdn) will determine your deemed gain/loss.
5. Unless you have exercised the RSU, there should be nothing to report yet, since it is not 'yours'. Once you exercise, it will be treated under the current options rules
6. The exercise you did make will be reported on your 2007 return as wages. They are now 'yours' and are treated like any other stock, with the cost being what was included in your wages.
Assuming you meant schedule 3 whgere you say T3, your deemed disposition would go on next years schedule 3. as to your exercise of your RSU, unless you sold, there is nothing to report on Sched 3. The exercise should be wages, no? Once you sell, then you will have a gain/oss. If you exercised AND sold at the same time, you would have a zero gain on sched 3. And remember, that happened in 2007, so would not impact your 2008 dperture return.
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
For your RSU, I'm pretty sure you will have income reported on your T4 as wages for 2007 erqual to the market price when you exercised. If this is the case, that becomes your cost for future capital gain/loss calcualtions.
And a note on US tax return. It is very likely that your and your spiuse will file jointly for 2008, which means that transactions you do now, ebven before leaving canada, will have to be reprted on your 2008 US tax return, so keep this in mind.
And a note on US tax return. It is very likely that your and your spiuse will file jointly for 2008, which means that transactions you do now, ebven before leaving canada, will have to be reprted on your 2008 US tax return, so keep this in mind.
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
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dhirenasha
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