DEPARTURE TAX Question about capital gains - deemed disposition reacquisition -

David,
 
I met you last year with my father-in-law, xxxxxxxxx, when we consulted with you. I have a hopefully simple question. My wife and I lived in the US from July 2004-June 2005 for part of my education. We returned briefly in July 2005, between the period when one visa expired and the next one began, before returning to the US to start my permanent position at xxxxxxxxxxx. At that point we declared ourselves non-residents of Canada and paid taxes for the 'deemed dispositions' on some existing equities that we had in our portfolio. Some of those assets were sold in 2007. For US taxes, would the date for determining the cost base for the equities be the date that we entered the US to start my job, or the date that I actually started work (which corresponds to the start date of the H1B visa), or the date that I started my post-doctoral training in 2004 (since we paid US taxes for 2004)? Thanks for your help,
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david ingram replies

the cost basis for the assets should be the date you used for the Canadian deemed  disposition  according to article XIII(7) of the treaty.  Your cost price for US purposes would be the deemed disposition price for the Canadian Departure Tax -

7.  Where at any time an individual is treated for the purposes of taxation by a Contracting State as having alienated a property and is taxed in that State by reason thereof and the domestic law of the other Contracting State at such time defers (but does not forgive) taxation, that individual may elect in his annual return of income for the year of such alienation to be liable to tax in the other Contracting State in that year as if he had, immediately before that time, sold and repurchased such property for an amount equal to its fair market value at that time.

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David, 

I thoroughly enjoyed meeting with you earlier this week. My father-in-law has been keeping me updated on your correspondence with him. My wife and I had another question concerning the TDF 90 and foreign accounts. Over the years we had been living in Canada, we accumulated accounts that we stopped using, but had left $5 here and $10 there. I assume these accounts are inactive, but were never formally closed by us. What action should we take for these accounts assuming we can remember their details? And what if we can't remember the details such as account numbers, PINs, etc? Thanks,

Arthur Sit 

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david ingram replies:

Just about everyone has an inactive forgotten account somewhere.

It was always a joke with my family because we would be driving down a street in some small town and I would suddenly stop the motorhome and go in a bank and come out with anything from $50.00 to $2,700.  It was because I had 700 offices in 30 states and five provinces. when they closed, almost all had something left which was usually not worth bothering about.

Four years ago, the Financial Post listed me as having an unclaimed $2,200 in the Bank of Nova Scotia in Toronto.  I just checked  at http://ucbswww.bank-banque-canada.ca/scripts/search_english.cfm and found another one. (The Pitney Bowes account is mine,  it coincides with my closing an office in Toronto in 1982.)  I also think I found one for my sister and  an old one for my deceased mother.

I can not find any that looks like it belongs to your in-laws or yourself.

However, it takes ten years for them to transfer an outstanding balance so you have to look every year.

If you do not remember its existence, I do not think it matters.  Certainly $5.00 or $20.00 has likely been eaten up in service charges and the account has been closed by the institution.

Take a look.  If you just type in your surname, you will find that there are 32 possibilities for yours, none for your father in law, and 58 for 'ingram'.  Weibe has 60, while Roberts, Jones and Smith show the best 300 of whatever number actually exist with the specific name 'John Smith' having 37 all to itself.

By the way, there are dormant account searches for Swiss Bank accounts, English Bank Accounts and US accounts.

The US is a dog's breakfast because each state has its own set of rules.  Yo9u can get a start looking for a dormant or inactive account in the US at: http://www.unclaimed.org/

BUT, Canada has the same problem with credit unions where every province has a different set of rules and registry for dormant credit union accounts.  BC requires you to write to their office.

If the deposit was transferred on or after / since Sept 15, 1990, use

Unclaimed Property Office
Office of the Comptroller General
Ministry of Finance
P.O. Box 9413 Stn Prov Govt
Victoria, British Columbia V8W 9V1
e-mail: unclaimedmoney@gems2.gov.bc.ca
Contact: Michelle McBride 250-387-8793


If deposits were transferred to Credit Union Deposit Insurance Corporation/Financial
Institutions Commission prior to September 15, 1990, direct inquiries to the following
address:
Financial Institutions Commission
1900 - 1050 West Pender Street
Vancouver, B.C. V6E 3S7
Attention: Controller
Telephone: 604-660-2947
Fax: 604-660-3170
e-mail: FICOM@gems9.gov.bc.ca

Hope this helps.  I would forget about any account you can't remember.  

Although in doing my search of names, I did come up with a lady in Massachusetts who had a $39,000 dormant account in Canada.  For that much she is likely dead and there are heirs that would like. it.  There are several organizations who search for heirs and claim a finder's fee.

Type in "Confederation trust" and you will find thousands of hits from $3.00 up from the settlement of the bankruptcy of confederation trust which took place in August, 1994.  finally, the unclaimed balances were transferred  to the Bank of Canada on Dec 31, 2005 as shown by the following in which you will see that they can claim their $95.43 -- anyone know Dean?

  
Unclaimed Balance Information         
Name:         PRICE WATERHOUSE COOPERS INC LIQUIDATOR OF CONFEDERATION TRUST        
Payee:         BROWNING DEAN        
Address:         PAYEE: 1463 ACADIA DRIVE S.E.  CALGARY AB        
Official Cheque:         046854         Transferred to Bank of Canada:         $95.43        
Last Transaction Date:         1995/12/31         Transfer Date:         2005/12/31        
Status:         UNCLAIMED         Outstanding Balance:         $95.43        
Originating Bank:         CONFEDERATION TRUST , 321 BLOOR STREET EAST 7TH FLOOR , TORONTO , ON, M4W1H1         

To claim this account, please contact us <http://ucbswww.bank-banque-canada.ca/scripts/Getclaiminfo_english.cfm?claim=20008229484> 

Or how about the Bev Longstaff  re-election campaign which can collect a cool clean $118.68.
  
 
Unclaimed Balance Information         
Name:         PRICEWATERHOUSECOOPERS INC LIQUIDATOR OF CONFEDERATION TRUST        
Payee:         BEV LONGSTAF RE-ELECTION CAMPAIGN        
Address:         PAYEE: 450 407 2 STREET S.W.  CALGARY AB        
Official Cheque:         046934         Transferred to Bank of Canada:         $118.68        
Last Transaction Date:         1995/12/31         Transfer Date:         2005/12/31        
Status:         UNCLAIMED         Outstanding Balance:         $118.68        
Originating Bank:         CONFEDERATION TRUST , 321 BLOOR STREET EAST 7TH FLOOR , TORONTO , ON, M4W1H1         

To claim this account, please contact us <http://ucbswww.bank-banque-canada.ca/scripts/Getclaiminfo_english.cfm?claim=20008228437> 

She was not hard to find



 <https://mail.mayo.edu/exchange/M018135/Drafts/RE:%20More%20questions%20-%20Kin%20Phord-Toy%20Dormant%20inactive%20or%20unclaimed%20financial%20accounts%20-%20David%20Ingram%20gives%20expert%20income%20tax%20%26%20immigration%20help%20to%20non-resident%20Americans%20%26%20Canadians%20from%20New%20York%20to%20California%20to%20Mexico%20family,%20estate,%20income%20trust%20trusts%20Cr.EML/part1.04030600.01070303@centa.com> 

SAIT honours Bev Longstaff - 2006 Distinguished Alumnus

On March 12, 2007, family, friends and colleagues joined together in Macdonald Hall to celebrate and honour our 2006 Distinguished Alumnus, Bev Longstaff, EGT '78. Bev was honoured for her years as a passionate community leader and dedicated SAIT supporter. She was not only a student of SAIT, but a former instructor as well. After 10 years at SAIT, Bev successfully ran for office and became a City Alderman and served in that capacity for four terms.

Bev was the Calgary Director for the G8 Conference in 2002, and continues to be an ardent community leader and volunteer by serving for organizations such as: The Salvation Army Community Service Board, Calgary Homefront and SAIT's Board of Governors. She is well sought after for her advice and expertise, particularly in issues regarding Calgary's underprivileged population.

Speakers at the event commented on Bev's love for her family and the community, as well as, her immense contributions to the City of Calgary, and of course to SAIT.

I am just making the point that there are thousands of accounts out there and I can NOT imagine the US Dept of Treasury going after you or your spouse for an unreported $5.00 although the law  certainly gives them the right to do so once you have the obligation.  If you know where it is, report the account and then formally close it to be sure..


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On Mar 14, 2008, David Ingram wrote:

It is very unlikely that blind or unexpected email to me will be answered.  I receive anywhere from 100 to 700  unsolicited emails a day and usually answer anywhere from 2 to 20 if they are not from existing clients.  Existing clients are advised to put their 'name and PAYING CUSTOMER' in the subject line and get answered first.  I also refuse to be a slave to email and do not look at it every day and have never ever looked at it when I am out of town. 
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However, I regularly search for the words"PAYING CUSTOMER" and always answer them first if they did not get spammed out. For the last two weeks, I have just found out that my own email notes to myself have been spammed out and as an example, as I wrote this on Dec 25, 2007 since June 16th, my 'spammed out' box has 47,941 unread messages, my deleted box has 16645 I have actually looked at and deleted and I have actually answered 1234 email questions for clients and strangers without sending a bill.  I have also put aside 847 messages that I am maybe going to try and answer because they look interesting. -e bankruptcy expert  US Canada Canadian American  Mexican Income Tax service and  help
Therefore, if an email is not answered in 24 to 48 hours, it is likely lost in space.  You can try and resend it but if important AND YOU TRULY WANT OR NEED AN ANSWER from 'me', you will have to phone to make an appointment.  Gillian Bryan generally accepts appointment requests for me between 10:30 AM and 4:00 PM Monday to Friday VANCOUVER (Seattle, Portland, Los Angeles) time at (604) 980-0321.  david ingram expert  US Canada Canadian American  Mexican Income Tax  service and help.
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This is not intended to be definitive but in general I am quoting $900 to $3,000 for a dual country tax return.
$900 would be one T4 slip one W2 slip one or two interest slips and you lived in one country only (but were filing both countries) - no self employment or rentals or capital gains - you did not move into or out of the country in this year.
 
$1,200 would be the same with one rental
 
$1,300 would be the same with one business no rental
 
$1,300 would be the minimum with a move in or out of the country. These are complicated because of the back and forth foreign tax credits. - The IRS says a foreign tax credit takes 1 hour and 53 minutes.
 
$1,600 would be the minimum with a rental or two in the country you do not live in or a rental and a business and foreign tax credits  no move in or out

$1,700 would be for two people with income from two countries

$3,000 would be all of the above and you moved in and out of the country.
 
This is just a guideline for US / Canadian returns
 
We will still prepare Canadian only (lives in Canada, no US connection period) with two or three slips and no capital gains, etc. for $200.00 up.
 
With a Rental for $400, two or three rentals for $550 to $700 (i.e. $150 per rental) First year Rental - plus $250.
 
A Business for $400 - Rental and business likely $550 to $700
 
And an American only (lives in the US with no Canadian income or filing period) with about the same things in the same range with a little bit more if there is a state return.
 
Moving in or out of the country or part year earnings in the US will ALWAYS be $900 and up.
 
TDF 90-22.1 forms are $50 for the first and $25.00 each after that when part of a tax return.
 
8891 forms are generally $50.00 to $100.00 each.
 
18 RRSPs would be $900.00 - (maybe amalgamate a couple)
 
Capital gains *sales)  are likely $50.00 for the first and $20.00 each after that.

Catch - up returns for the US where we use the Canadian return as a guide for seven years at a time will be from $150 to $600.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc. Note that these returns tend to be informational rather than taxable.  In fact, if there are children involved, we usually get refunds of $1,000 per child per year for 3 years.  We have done several catch-ups where the client has received as much as $6,000 back for an $1,800 bill and one recently with 6 children is resulting in over $12,000 refund. 

This is a guideline not etched in stone.  If you do your own TDF-90 forms, it is to your advantage. However, if we put them in the first year, the computer carries them forward beautifully.
 
This from "ask an income trusts tax service and immigration expert" from www.centa.com or www.jurock.com or www.featureweb.com. David Ingram deals on a daily basis with expatriate tax returns with multi jurisdictional cross and trans border expatriate problems  for the United States, Canada, Mexico, Great Britain, United Kingdom, Kuwait, Dubai, Saudi Arabia, Thailand, Indonesia, Japan, China, New Zealand, France, Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, Iran, India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, US, UK, GB, and any of the 43 states with state tax returns, etc. Rockwall, Dallas, San Antonio Houston, Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax and Immigration Tips, Income Tax  Immigration Wizard Antarctica Rwanda Guru  Consultant Specialist Section 216(4) 216(1) NR6 NR-6 NR 6 Non-Resident Real Estate tax specialist expert preparer expatriate anti money laundering money seasoning FINTRAC E677 E667 105 106 TDF-90 Reporting $10,000 cross border transactions Grand Cayman Aruba Zimbabwe South Africa Namibia help USA US Income Tax Convention. Advice on bankruptcy  e bankruptcy expert  US Canada Canadian American  Mexican Income Tax service and help .

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