deemed disposition question

lanman2000 · Post by **lanman2000** » Fri Apr 10, 2015 9:15 am

Let's say I live in the US. I have a traditional IRA worth $50,000. I move to Canada for 5 years. Then I move back to the US. The IRA has grown to $100,000 because the market has gone up. Do the deemed disposition rules for Canada apply to the IRA? That is do I owe Canada capital gains taxes on the $50,000 gain that occurred in the IRA whilst resident in Canada? If so is there any way to reduce the bite?

nelsona · Post by **nelsona** » Fri Apr 10, 2015 10:12 am

No. Retirement accounts, including foreign ones, are not subject to deemed disposition.

btw, if you were to bring to Canada a non-sheltered investment for the entire period you were in Canada, and left before the 5 year mark, that investment would not be subject to deemed disposition.

lanman2000 · Post by **lanman2000** » Fri Apr 10, 2015 10:50 am

Fantastic. Thanks. I searched online and couldn't find any guidance on if IRAs were exempt from deemed disposition. Where is it?

nelsona · Post by **nelsona** » Fri Apr 10, 2015 10:56 am

It's all in my head.

Why not look at the deemed disposition form that you would need to fill out? A little effort, man.

lanman2000 · Post by **lanman2000** » Fri Apr 10, 2015 2:04 pm

I see it now. It wasn't in the list on the form but in subsection 128 1(10) of the income tax act the list is longer and it specifies "foreign retirement arrangement".

Thanks again