Question about taxation of a musical instrument

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taxintoronto
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Joined: Sat Apr 01, 2017 11:22 am

Question about taxation of a musical instrument

Post by taxintoronto »

Professional violin player moves to Canada in 2009 from United States. Violin player is a Canadian resident from 2009 onwards. Violin player is a US citizen.
Violin was originally purchased in USA for 100,000USD in 2005. Sells violin (in USA) in 2016 for 200,000USD. Value of violin upon arrival in Canada in 2009 was 150,000USD. Depreciation has never been taken on the violin.
I want to make sure I understand how the violin should be taxed.
My thought is: Violinist pays taxes to Canada on the 2009-2016 portion of the gain. Violinist pays taxes to US on 2005-2009 portion of the gain. The 2009-2016 portion of the gain goes on the US return as well, but is sourced to Canada in order to get foreign tax credit.
Does this sound right?
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