In-kind transfer of TFSA securities to an RRSP - US tax implications

[taxenthusiasm]

I am wondering what the US tax implications would be for transferring securities in-kind from a TFSA to an RRSP as a tax resident of both the US and Canada. Would this be considered a deemed disposition and require capital gains to be reported on a US return? For example, this would be relevant when repaying a Home Buyers' Plan RRSP withdrawal using TFSA securities; if possible, it would be ideal to avoid officially liquidating the assets in question and realizing a taxable capital gain. Any citations to IRS guidance or professional commentary on this specific scenario would be appreciated.

[nelsona]

So, just to be clear, you are a resident of Canada, and a US taxpayer, by reason of citizenship?

[taxenthusiasm]

nelsona wrote:
> So, just to be clear, you are a resident of Canada, and a US taxpayer, by
> reason of citizenship?

Yes, that is correct. In fact, I am a dual citizen of the US and Canada who is currently residing in Canada.

[nelsona]

In that case, your in-kind transfer from your TFSA to your RRSP is treated as follows:

For Canada, this is considered a deemed disposition, resulting in a capital gain. Of course, the deduction for the contribution should make up for it. But you can still use the tax arising from the cap gain against the US tax....see below

For US, since the procedure of in-kind contributions from a taxable account to a non-taxable account is not strictly allowed, this would be considered a sale as well. .
Besides, since you are a Cdn resident, any cap gains arising from such a securities sale, deemed or otherwise, would not be taxable in US, by treaty. The fact that you are a US citizen however, means you must reort the gain, but there is a foreign tax credit procedure for reducing the US tax to effectively zero.