Tax efficient move of investments to Canada

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Mat.Mo
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Joined: Tue Apr 04, 2017 10:05 pm

Tax efficient move of investments to Canada

Post by Mat.Mo »

Hi All!

After a few years of working in the USA, I'll move back to Canada this month. I have an investment account in the USA with ETFs, stocks, mutual funds, bonds & cash. What would be the most tax efficient way to move those assets to a Canadian investment account?

1) Should I liquidate the assets BEFORE leaving the USA? I would be taxed on the capital gains in the USA. Would Canada tax me again on the cash moved to Canada?

2) Should I liquidate the assets AFTER leaving the USA? It's unclear to me how the USA and/or Canada would tax me in this case.

3) Should I attempt to transfer the assets "as-is" to a Canadian investment account BEFORE I leave the USA? It's unclear to me how the USA and/or Canada would tax me in this case.

4) Should I attempt to transfer the assets "as-is" to a Canadian investment account AFTER I leave the USA? It's unclear to me how the USA and/or Canada would tax me in this case.

5) Other strategy?

Any insights would be much appreciated! >:)

Mat

P.S.: Note that I have a separate 401(k) account, which I'll leave as-is in the USA.
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

When moving/returning to Canada, all your investments are deemed sold and repurchased the day you move, in effect zeroing any gains/losses.
So...
If you are not a US citizen or green cardholder the best strategy is to KEEP all your winning investments until you are no longer a US taxpayer, and to sell all losing investments before you leave for Canada.

Your gains will thereby not be taxed in US, nor in Canada. And your losses will be available to you on your final US return.
When you move your stuff to Canada is not important, Transfers do not trigger tax. Mutual funds can't be transferred.
Cash has no bearing on this discussion.

The daye you move to Canada is typically fixed. However the date you are no longer a US taxpayer can either be that date of the end of year.
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
Mat.Mo
Posts: 2
Joined: Tue Apr 04, 2017 10:05 pm

Post by Mat.Mo »

Thank you very much!
nelsona
Posts: 18699
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

Just to be clear, CANADA views your investments sold/bought on move day. US does not. They only deal in actual sales.
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
xiaoice
Posts: 51
Joined: Fri Mar 24, 2017 2:38 pm

Post by xiaoice »

How about moving from Canada to USA one month later?
should I keep or sold the mutual fund on TFSA now?
[quote="nelsona"]Just to be clear, CANADA views your investments sold/bought on move day. US does not. They only deal in actual sales.[/quote]
nelsona
Posts: 18699
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

This is a separate issue, which has been discussed elsewhere.
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
xiaoice
Posts: 51
Joined: Fri Mar 24, 2017 2:38 pm

Post by xiaoice »

I checked the past post. It looks like I'd better close the account last year.... But since I am going to USA this year, the TFSA in anyway need to be reported to IRS, right? So should I close it now or later this year? I invest in TFSA a few years ago and never touch it... When reporting it, what book value should I use? the cost when I purchase it a few years back or the market value on the data I leave.



Thank you, Nelson. I will search more.
[quote="nelsona"]This is a separate issue, which has been discussed elsewhere.[/quote]
nelsona
Posts: 18699
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

Did you not read my earlier response?
Let me make it clearer:
Please do not post unrelated material to existing threads.
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
xiaoice
Posts: 51
Joined: Fri Mar 24, 2017 2:38 pm

Post by xiaoice »

sorry about this. I won't.
[quote="nelsona"]Did you not read my earlier response?
Let me make it clearer:
Please do not post unrelated material to existing threads.[/quote]
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