Tax on Foreign Currency

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Tax on Foreign Currency

Post by adw » Tue Dec 03, 2019 6:56 pm

In preparation of my plans to immigration to the US, I've been converting my CAD to USD.

I've been converting my CAD to USD using Norbert's Gambit with Questrade. I have been meticulously calculating my capital gain with each transfer and will be reporting all capital gains/loss surpassing 200 dollars to CRA. The USD is sitting in my Canadian TD US dollar account, where I am making a small amount of interest, which will be taxed.

Today, I've been doing some reading on deemed disposition and would like to clarify something. Technically any purchase I make with my USD, such as toothpaste, I would have to calculate my capital gain/loss to . If I do not use any of my USD, let it sit in my Canadian TD bank US dollar account, when I do immigrate and file my departure tax, would I be taxed on my USD sitting in this account? What happens if say a few months after I depart, I purchase a house with that money, what, if any, would be my tax liability in Canada?


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Re: Tax on Foreign Currency

Post by nelsona » Thu Dec 05, 2019 4:39 pm

Cash is not subject to deemed disposition. And cap gains incurred after departure would not be taxed in Canada, and USD exchanges to other things are not taxed by IRS, so you are fine once you leave.
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Re: Tax on Foreign Currency

Post by cat » Thu Jan 16, 2020 1:37 am

Wow - I have always wondered if I moved back to the US if my US dollar account would be subject to the departure tax. I thought that I would have to sell my USD convert the value to Canadian dollars, figure out the ABC and would be taxed on it... or something like that :) That's a relief! On the T1135 cash accounts are considered Property so I figured it was the same for the departure tax. Little do I really know!

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