Reporting capital losses and ordinary dividends to US

Celineb · Post by **Celineb** » Thu Mar 25, 2010 1:51 pm

I moved back to Canada in April 2009, and sold my US mutual funds in May 2009. My 1099-DIV says that I have $160 of ordinary dividends, and I have a capital loss of over $10K from selling the mutual funds.

Do I need to file 1040NR or 540NR (California) to report this? I essentially want to file so they know I moved back to Canada, that I sold the investments and that I didn't make a cent on them. I have no other income/loss to report as I was a deemed resident of Canada (since 2005), working for the Cdn government.

On a separate note, my CPA told me that I could claim my capital loss on my Cdn return (to use for future cap gains in Canada). Is that correct? I understand that I should use the date I moved back as the cost basis, and also convert using the exchange rate for the date it was sold.

Celineb · Post by **Celineb** » Thu Mar 25, 2010 2:07 pm

Just realizing that this re-entry date deal might not apply to me considering I was always a resident of Canada (went from deemed to factual in April 2009). So the timing probably wasn't crucial for me...

Celineb · Post by **Celineb** » Thu Mar 25, 2010 2:07 pm

So what do I use as the cost basis? The original purchase price?

nelsona · Post by **nelsona** » Thu Mar 25, 2010 2:36 pm

Well, were youaever non-resident. Deemed resident is a pretty narrowly defined entity (like Cdn govt worker)

nelsona · Post by **nelsona** » Thu Mar 25, 2010 2:38 pm

I see from previous posts that you were govt worker.

So, your cap gains and losses are reported the same as they would had you never left canada, so no timing is involved.

Just rememebr to use the exchange rates in effect when you bought as well as the one wehen you sold.

Celineb · Post by **Celineb** » Thu Mar 25, 2010 2:44 pm

So I don't need to file a 1040NR or 540NR?? I have been for the past few years as a deemed resident (on my cap gains distributions), and claimed the credits on my Cdn tax return...

If I don't need to file, how do I tell the US I've left?

nelsona · Post by **nelsona** » Thu Mar 25, 2010 4:11 pm

Where did you get that from my repsonse? My response was how you dealt with the Cdn taxation of your capital transaction.

You file your IRS and Cali taxes as you have in the past.

Celineb · Post by **Celineb** » Thu Mar 25, 2010 5:32 pm

Sorry, I read that too quickly! Thanks for the advice...

Am a bit peeved that I have to pay US taxes on my (minimal) ordinary dividends, when I have such a huge loss....oh well.

nelsona · Post by **nelsona** » Fri Mar 26, 2010 9:10 am

That's the danger of mutuals.