Hi,
My husband and I moved back to Canada in August (after being in the US for a year). We are filling again as residents in the US for the full year and as partial year residents in Canada. In November 2008 while we were in the States, he bought a stock (Sony) and in Dec 2009 sold it after we have moved back. We're wondering if we have to report the gain of this stock in our Canadian taxes or if it's only reported on the US side.
Thanks in advance!
Sold US Stocks after moving back to Canada
Moderator: Mark T Serbinski CA CPA
No you can't. US will accept your Cdn tax as a credit on your 1040 thru form 1116, as with all your Cdn tax on Cdn income that you report on 1040.
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"]No you can't. [/quote]
I'm wondering if this is consistent with Article 13, paragraph 7 of the Tax Treaty:
7. Where at any time an individual is treated for the purposes of taxation by a Contracting State [Canada] as having alienated a property and is taxed in that State by reason thereof and the domestic law of the other Contracting State [USA] at such time defers (but does not forgive) taxation, that individual may elect in his annual return of income for the year of such alienation to be liable to tax in the other Contracting State [USA] in that year as if he had, immediately before that time, sold and repurchased such property for an amount equal to its fair market value at that time.
Sure looks like you can elect to do a deemed disposition and reacquisition on the US side...
I don't think it would be to your advantage to do this, since the US would tax the full gain, not 50% as Canada does and you would end up paying a lot more!
I'm wondering if this is consistent with Article 13, paragraph 7 of the Tax Treaty:
7. Where at any time an individual is treated for the purposes of taxation by a Contracting State [Canada] as having alienated a property and is taxed in that State by reason thereof and the domestic law of the other Contracting State [USA] at such time defers (but does not forgive) taxation, that individual may elect in his annual return of income for the year of such alienation to be liable to tax in the other Contracting State [USA] in that year as if he had, immediately before that time, sold and repurchased such property for an amount equal to its fair market value at that time.
Sure looks like you can elect to do a deemed disposition and reacquisition on the US side...
I don't think it would be to your advantage to do this, since the US would tax the full gain, not 50% as Canada does and you would end up paying a lot more!
That article only applies to LEAVING canada, since deemed acquisition on arrival in canada -- although it does satisfy the "treeted as having alienated a property" clause, does not satisfy "and is taxed in that State by reason thereof", since no tax arises from deemed acquisition.
Only deemed disposition meets the test of that article -- and that was its intent.
Only deemed disposition meets the test of that article -- and that was its intent.
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"]That article only applies to LEAVING canada, since deemed acquisition on arrival in canada -- although it does satisfy the "treeted as having alienated a property" clause, does not satisfy "and is taxed in that State by reason thereof", since no tax arises from deemed acquisition.
Only deemed disposition meets the test of that article -- and that was its intent.[/quote]
Great reading of the fine print. Makes sense. Thanks.
Only deemed disposition meets the test of that article -- and that was its intent.[/quote]
Great reading of the fine print. Makes sense. Thanks.