Tax implications of transfers in-kind?

moneyissues123 · Post by **moneyissues123** » Wed Jun 08, 2016 10:13 am

Are there any IRS tax implications with a transfer in-kind of securities held in a Canadian investment account to an American investment account?

nelsona · Post by **nelsona** » Wed Jun 08, 2016 10:34 am

No, this is not at triggering event. Nor for Cdn tax purposes. Only your deemed disposition (coupled with decision to invoke the treaty) will change the cost basis for IRS purposes.

moneyissues123 · Post by **moneyissues123** » Wed Jun 08, 2016 11:28 am

What if there is no deemed disposition on account of changing residency status because these investments were held on a TFSA?

nelsona · Post by **nelsona** » Wed Jun 08, 2016 1:03 pm

Then, as I said, "Only your deemed disposition (coupled with decision to invoke the treaty) will change the cost basis for IRS purposes".

So your investments retain their cost basis. And if they are sold while you are a US tax resident (or claim to be one), you will owe tax on the entire gain.

Your TFSA should be collapsed before leaving in any event.

nelsona · Post by **nelsona** » Wed Jun 08, 2016 1:05 pm

And please ask the question you are intending to have answered. A TFSA is not an investment account, nor is an RRSP, LIRA, RRIF, RESP, just so we are clear.