I am single, moved 05/2016 to NYC from Ontario and so far have the following sources of income.
Canada wage 01-05/2016
US wage 05-12/2016
Canada + US bank interests and dividends in all 2016
Capital gains of US/Canadian stock/mutual funds held in Canadian investment account, sold prior to US move
Capital gains of US/Canadian stock/mutual funds held in TFSA/RRSP, sold prior to US move
I'm reporting the following
-Canada Federal:
Employment income in Canada plus all capital gains/dividends/interests except TFSA, with a departure of 05/2016
No provincial tax reporting
-USA Federal: Form 1040 full year
NYC wage income (~60k) + Canada wage income (~20k) in USD
Foreign tax credit with form 1116 (from Canada Federal T1 line 435 total payable, or should I use 437 as total deducted already?)
US sourced investment income
Capital gains of US stock held in Canadian investment account and TFSA, sold prior to US move
-NY State / NYC tax forms: I'm claiming part year resident, is that correct?
NYC wage income + US sourced investment income only
Questions:
1. For USA, I assume I also need to report the capital gains of US stock held in TFSA, sold prior to US move as income on 1040? If so, can I exclude this in form 2555 as income exclusion? What would be the calculation for the cost basis since the stocks were held from 2009, can I use Jan 1, 2016 for the market value?
2. Assume 1 is correct, since the TFSA gain is large (~30k) is there a way to avoid the tax if I file part year 1040 and 1040NR as dual status? I will basically have no US-sourced income 01-05/2016 on the 1040NR right?
3. Are US stocks and mutual funds/ETFs held in Canadian TFSA/Investment account considered Not Effectively Connected Income?
TFSA capital gains for
Moderator: Mark T Serbinski CA CPA
Obviously I'm noyt going to answer all this, except to point out that your full year return requires you to report your cap gains from before your move as well, and ALL the TFSA income for the year too. Look at using 2555 for your Cdn wages rather than 1116.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
You have no option that avoids you having to report ALL income to US after May, including the TFSA income.
And when you say "no provincial tax reporting" for the first part of the year, I trust you only meant no separate Ontario return. Of course you owe ON tax on the income reported on your departure return, since you were ON resident, and will indicate such on your return as where you lived on "Dec 31 or the last day you resided in Canada"/
And when you say "no provincial tax reporting" for the first part of the year, I trust you only meant no separate Ontario return. Of course you owe ON tax on the income reported on your departure return, since you were ON resident, and will indicate such on your return as where you lived on "Dec 31 or the last day you resided in Canada"/
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Ah thanks so much for pointing that out, I chose non-resident since the ufile interface asked only about residency on Dec 31 2016. I've changed it to ON now as the last day I resided in Canada, I assume the tax for ON can be used towards NY resident credit?
For the TFSA part, I've followed the recommendations from prior and sold all assets prior to becoming US resident in 2016. I know this gets reported on full year 1040 but how does the capital gains income gets calculated? Can I base it on the market value gain in 2016 only?
Lastly, I'm trying out the 1040NR form and the question regarding changing residency visa/status, does B1 to TN count? As in the prior visits I made to US as visitor B1/2 or for transit purpose before gaining TN status.
Thank you for your time
For the TFSA part, I've followed the recommendations from prior and sold all assets prior to becoming US resident in 2016. I know this gets reported on full year 1040 but how does the capital gains income gets calculated? Can I base it on the market value gain in 2016 only?
Lastly, I'm trying out the 1040NR form and the question regarding changing residency visa/status, does B1 to TN count? As in the prior visits I made to US as visitor B1/2 or for transit purpose before gaining TN status.
Thank you for your time
Look more carefully at ufile control. They ask your residency status, and one of them is Emigrant.
Your TFSA income is based on its original value. If you truly did make these TFSA collapse before moving to US, you might want to consider using dual-status instead of full year. The goal of filing full year is to give the lowest US tax result. Since you are single, there really isn't much advantage to filing full year in any case (as opposed to married), and it make even less sense if you are going to have to report $30K of Cdn income with no Cdn tax to write against it.
I would be filing Dual-status if I were you.
The residency is for those who switch from within US. doesn't apply.
Your TFSA income is based on its original value. If you truly did make these TFSA collapse before moving to US, you might want to consider using dual-status instead of full year. The goal of filing full year is to give the lowest US tax result. Since you are single, there really isn't much advantage to filing full year in any case (as opposed to married), and it make even less sense if you are going to have to report $30K of Cdn income with no Cdn tax to write against it.
I would be filing Dual-status if I were you.
The residency is for those who switch from within US. doesn't apply.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Thanks nelsona, I'm looking into the dual status now using TaxAct
For 1040, I'm reporting all US income after May plus some Canadian interest/dividend income after 05/2016
For 1040NR, I'm reporting pretty much zero income except some non-resident withholding tax levied by the US when I sold my stocks before moving to US, 01-05/2016
1. Am I correct to assume that I cannot deduct taxes paid to CRA on 1040 since it's mostly taxes levied on my Canadian wages?
2. For 1040NR, I'm confused by the duplicate questions regarding income/deduction. Am I assuming that I should be answering the situation that applied to me for the duration of Jan - May only? Like, should I answer no to the 2016 health coverage question since I was a non resident?
3. Do I need to file a state NY form along with 1040NR or just claim non-resident? I already have a part year NY form attached to 1040.
4. For my Canadian wages and taxes paid to CRA, as well as capital gains before becoming US resident, do they then need to be reported at all on any form? I'm confused since 1040NR is only applicable to US sourced income so it looks like I don't owe anything in 1040NR.
For 1040, I'm reporting all US income after May plus some Canadian interest/dividend income after 05/2016
For 1040NR, I'm reporting pretty much zero income except some non-resident withholding tax levied by the US when I sold my stocks before moving to US, 01-05/2016
1. Am I correct to assume that I cannot deduct taxes paid to CRA on 1040 since it's mostly taxes levied on my Canadian wages?
2. For 1040NR, I'm confused by the duplicate questions regarding income/deduction. Am I assuming that I should be answering the situation that applied to me for the duration of Jan - May only? Like, should I answer no to the 2016 health coverage question since I was a non resident?
3. Do I need to file a state NY form along with 1040NR or just claim non-resident? I already have a part year NY form attached to 1040.
4. For my Canadian wages and taxes paid to CRA, as well as capital gains before becoming US resident, do they then need to be reported at all on any form? I'm confused since 1040NR is only applicable to US sourced income so it looks like I don't owe anything in 1040NR.
Your 104NR should not have any cap gains, since these were from before you moved and are thus Cdn sourced. That is the whole point of doing 1040NR. That is only for US-sourced income.
What firm withheld US tax. Did you not file a W8-BEN with them?
1. You are not reporting any Cdn income on your 1040, and if you are, it should not have been taxed in canad anywys, and should not be appearing on a Cdn tax return.
You are a part year resident of NY and must report NY souerce income that appears on your 1040, including investment income. Basically all income on your 1040 is also reported on your NY return.
What firm withheld US tax. Did you not file a W8-BEN with them?
1. You are not reporting any Cdn income on your 1040, and if you are, it should not have been taxed in canad anywys, and should not be appearing on a Cdn tax return.
You are a part year resident of NY and must report NY souerce income that appears on your 1040, including investment income. Basically all income on your 1040 is also reported on your NY return.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Thanks for clarifying Nelsona.
I've set up my 1040 and 1040NR as dual status and there's a 3-4k refund on the 1040 part year. When I previously tried full year 1040 I was then owing so much more when the CDN income is included even with 1116/2555 so I got confused and wasn't sure if I did it correctly.
I'm trying to figure out the IRA definition of Income Not Effectively Connected With a U.S. Trade or Business, the 1040NR schedule NEC. Are US securities (stocks, ETF) held under Canadian account required to be reported there for dividends/capital gains? Or when they say US-sourced, it literally just means the location of the financial institution that performs the transaction? In that case I should be ok not reporting since all of them were Canadian based regardless of my portfolio.
I had a US stock held under CIBC non-registered investment account and the US company was delisted (purchased by another company for certain price per share) in Feb 2016 so my shares were just converted into cash at that price. The US gov levied 15% withholding tax on that, which I have included in my Canadian return, but based on your answer it is considered CDN sourced and I don't need to include in 1040NR?
Yes my NY return is pretty much the same as my Federal.
I've set up my 1040 and 1040NR as dual status and there's a 3-4k refund on the 1040 part year. When I previously tried full year 1040 I was then owing so much more when the CDN income is included even with 1116/2555 so I got confused and wasn't sure if I did it correctly.
I'm trying to figure out the IRA definition of Income Not Effectively Connected With a U.S. Trade or Business, the 1040NR schedule NEC. Are US securities (stocks, ETF) held under Canadian account required to be reported there for dividends/capital gains? Or when they say US-sourced, it literally just means the location of the financial institution that performs the transaction? In that case I should be ok not reporting since all of them were Canadian based regardless of my portfolio.
I had a US stock held under CIBC non-registered investment account and the US company was delisted (purchased by another company for certain price per share) in Feb 2016 so my shares were just converted into cash at that price. The US gov levied 15% withholding tax on that, which I have included in my Canadian return, but based on your answer it is considered CDN sourced and I don't need to include in 1040NR?
Yes my NY return is pretty much the same as my Federal.
Again, you are coming to this very late, so detailed answers are forthcoming. Cap gains/losses from US stocks held by Cdn residents rrent taxable in US (did you ever have to pay US tax in previous years while living in Canada? No) So no investment income is reported on yoru 1040NR, except US dividends, that would have had US tax withheld by your CDn broker. That was flat taxed and remains so on 1040NR. That is all that you might have to report.
You've left yourself with a complex tax situation which I would be more than willing to spend more time in May or June, or January. You left this too late for now.
You've left yourself with a complex tax situation which I would be more than willing to spend more time in May or June, or January. You left this too late for now.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Wish I saw this post last year... I run into the similar situation.
Guess I need to sell my TFSA now, hoping that next year I can file tax as dual resident.
Thanks, Nelsona.
[quote="nelsona"]Again, you are coming to this very late, so detailed answers are forthcoming. Cap gains/losses from US stocks held by Cdn residents rrent taxable in US (did you ever have to pay US tax in previous years while living in Canada? No) So no investment income is reported on yoru 1040NR, except US dividends, that would have had US tax withheld by your CDn broker. That was flat taxed and remains so on 1040NR. That is all that you might have to report.
You've left yourself with a complex tax situation which I would be more than willing to spend more time in May or June, or January. You left this too late for now.[/quote]
Guess I need to sell my TFSA now, hoping that next year I can file tax as dual resident.
Thanks, Nelsona.
[quote="nelsona"]Again, you are coming to this very late, so detailed answers are forthcoming. Cap gains/losses from US stocks held by Cdn residents rrent taxable in US (did you ever have to pay US tax in previous years while living in Canada? No) So no investment income is reported on yoru 1040NR, except US dividends, that would have had US tax withheld by your CDn broker. That was flat taxed and remains so on 1040NR. That is all that you might have to report.
You've left yourself with a complex tax situation which I would be more than willing to spend more time in May or June, or January. You left this too late for now.[/quote]
Please do not use quotes. They do not work and clutter the posts.
If you have not yet moved to US, you can definitely close your TFSA now (before moving) and avoid any reporting and tax issues for 2017, by filing dual-status.
The only remaining question will be if it is to your advantage to file dual-status. From most discussions, the requirement to report the gains incurred from closing TFSA may outweigh the benefit oof filing full year.
But, regardless, you should close TFSA, or at least sell all your winning positions now before moving. The best is to close the TFSA altogether. You can always re-fund if you return to Canada.
If you have not yet moved to US, you can definitely close your TFSA now (before moving) and avoid any reporting and tax issues for 2017, by filing dual-status.
The only remaining question will be if it is to your advantage to file dual-status. From most discussions, the requirement to report the gains incurred from closing TFSA may outweigh the benefit oof filing full year.
But, regardless, you should close TFSA, or at least sell all your winning positions now before moving. The best is to close the TFSA altogether. You can always re-fund if you return to Canada.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing