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.
Tax efficient move of investments to Canada
Moderator: Mark T Serbinski CA CPA
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.
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
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]
Thank you, Nelson. I will search more.
[quote="nelsona"]This is a separate issue, which has been discussed elsewhere.[/quote]