Offset TFSA gains

[Southern]

I didn't close my TFSA soon enough and I am stuck reporting it on 3520 and 3520A.

From my monthly statements, I can piece together Interest and Dividends and sale prices.

My 2 questions:

1) How do I calculate capital gains? book value at time of sale, cost basis from date when I left Canada?

2) I received my Canada departure Notice of Assessment and I assume I can use my taxes paid in Canada as a credit on 1040; can any of that tax pad offset gains in the TFSA?

Bonus question: I had a small capital loss in 2008 from the collapse of Lehman Brothers. Can I somehow use that to help offset TFSA gains?

[nelsona]

1. Cost basis will be the original cost basis, unaffected by your move date.

2. No, your TFSA was tax free. However, if you were reporting other passive investment income from Canada, you could use the Cdn tax from those sources.

Bonus: No.

[Southern]

Yes, I did have passive income from interest, dividends and return of capital that I paid tax o. I also had an HBP repayment which I paid tax on. Not sure if that counts too.

And on the TFSA, the cost basis isn't stepped up to the date of my departure / deemed disposition?

[nelsona]

Did you report this passive income on your US return, along with your TFSa income. Then you can use the Cdn apportioned to that income on your 1116 credit form.

You can't use the HBP, since it wasn't reported as income on your 1040. And, of course, if you repaid your HBP, there was no tax. I presume you meant tax on NON-repayment of HBP.

Your best bet may just be to use tax PAID in calendar year 2016 as a deduction on your 2016 1040 (assuming you had to file one) . And tax PAID in 2017 as a deduction on your 2017 1040.

[Southern]

Yes, the passive income is being reported on the 1040.

Separately, I spoke with TD about my now closed TFSA. They claim that it was a deposit type TFSA and not a Trust and will be sending me a letter to that effect. I hope that will eliminate the burden of the 3520 & 3520a. I still report it on fincen114 and 8938.

[nelsona]

I guess that is fine. Hard to say that an account that had capital investments was a deposit account, however.

[Southern]

In regards to 1116;

Would EI be considered passive income because it is not earned wages?

Otherwise it would be general category?

[nelsona]

No, it is general limit income.