Leaving the United States and returning to Canada -

My question is: Applicable to both US and Canada
QUESTION: I hold dual citizenship. Born in Canada, naturalized in the US.I
have lived in the USA for 17 years. I'm thinking of moving my permanent
residence back to Canada. What are the tax implications with the USA (and
for that matter Canada) of making this move. Specifically, can I move all my
financial assets to Canada without paying tax to the USA?
---------------------------------------------------------------------------
david ingram replies:
This is a good question.
Because the US requires you to file a US return for the rest of your life or
as long as you remain a US citizen, there is no deemed disposal of your
assets.  However, if you were still a green card holder and returned to
Canada and gave up your Green card after being there 8 years, there would be
a deemed disposal of your assets and you would be liable on that departing
tax return to pay tax on any capital gains realized because of the pretend
sale. There is also a deemed disposal and tax to pay if you decide to
renounce your US citizenship.
No matter what you do with the US, at the same time, there is a deemed
acquisition price for Canada - Everything you owned is revalued as you cross
the border and you do need to deal with the values and KEEP a record.  In a
similar situation the CCRA has sent me a letter today demanding documentary
proof of the value of a piece of property in April, 1988 when someone
crossed the border.
This deemed acquisition is hard to understand sometimes. Forget about
exchange rates in the following examples.
What it means is that if you owned a share of XYZ that you paid $100 for and
it was worth $150 when you entered Canada, and you sold it for $200, the US
would tax you on $100 and Canada on $50.00 profit.
At the same time, if you paid $200 for a stock ABC and it was worth $100
when you crossed the border and you sold it for $200, you would owe Canada
tax on $100 and nothing to the US .
Each item has to be valued including antiques, old cars, etc.  For instance,
I have a 1953 Chevrolet which is worth between $15,000 and $20,000.  It will
only go up in value so I would want an appraisal on it.
Another client has had his Steinway grand piano go up substantially and now
that he ahs passed away, the value when he brought it to Canada is important
because it is deemed to be sold on the date of death.
When you move all your financial assets to Canada, you will then pay tax to
Canada first and then report the income again on your US 1040.  You will
claim foreign tax credits on schedule 1116 with your 1040.
david ingram
Hope this helps you.
 David Ingram expert income tax help and preparation of US Canada Mexico
non-resident and cross border returns with rental dividend wages
self-employed and royalty foreign tax credits
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
Home office at:
4466 Prospect Road
North Vancouver,  BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 10 AM to 10 PM 7 days a week (please do not fax or phone
outside of those hours as this is a home office)
email to taxman at centa.com <mailto:taxman at centa.com>
www.centa.com <http://www.centa.com/>  www.david-ingram.com
<http://www.david-ingram.com/>
Disclaimer:  This question has been answered without detailed information or
consultation and is to be regarded only as general comment.   Nothing in
this message is or should be construed as advice in any particular
circumstances. No contract exists between the reader and the author and any
and all non-contractual duties are expressly denied. All readers should
obtain formal advice from a competent and appropriately qualified legal
practitioner or tax specialist for expert help, assistance, preparation, or
consultation  in connection with personal or business affairs such as at
www.centa.com <http://www.centa.com> . If you forward this message, this
disclaimer must be included."
Be ALERT,  the world needs more "lerts"
listen to David Ingram Thursdays on Channel 114 Sirius Radio The Good Life
with Jesse Dylan Daily at 12 noon New York time - david Ingram International
Income Tax expert - real estate IRA's 401(K)
Thursday Jan 5, 2006 will be at 10 AM Vancouver time, 1 PM Manhattan time.
You can listen live on Channel 114 of your Satellite Radio or listen to the
stream on www.lime.com <http://www.lime.com> .  You have to have the latest
version of Real Player to listen live on the Internet. You can get the
latest version free by going to
http://www.real.com/playerplus/index.html?src=downloadr
<http://www.real.com/playerplus/index.html?src=downloadr>
After you are up to date, you can listen to the live program by clicking on:
http://lime.com/more/Radio_Play/index.html
<http://lime.com/more/Radio_Play/index.html>
If you are in Canada and have a question to ask and want to email it to me
in advance, we will try and use it on the air and if not, I will make a real
effort to answer it by email.
But better would be a phone call if you live in the USA.
Yep, a live free phone call is available from anywhere in The United States
(not Canada yet) at 1-866-LIME-114 or 1-866-546-3114
Now, I do not have to tell you that if you want this service available in
the future, support now would be nice.  Help me show those Manhattan types
that there is a real demand for a Canadian to be answering US tax questions
with particular emphasis on those Cross-Border or out of country questions.
Thousands of tax consultants can answer a child tax credit but not many can
deal with foreign tax credits and earned income exemptions and a foreign
vacation home or foreign bank accounts or that foreign pension you still
have after an American works in Australia, or Algeria or Spain or Canada.
This from "ask an income tax and immigration expert" from www.centa.com
<http://www.centa.com/>  or www.jurock.com <http://www.jurock.com/>  or
www.featureweb.com <http://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
Alaska,  Alabama,  Arkansas,  Arizona,
California,  Colorado, Connecticut,
Delaware, District of Columbia,  Florida,
Garland, Georgia,  Hawaii,  Idaho,  Illinois,
Indiana,  Iowa,  Kansas,  Kentucky,
Louisiana,  Maine,  Maryland,
Massachusetts, Michigan, Minnesota,
Mississippi,  Missouri,  Montana,  Nebraska,
Nevada, New Hampshire,  New Jersey,
New Mexico, New York, North Carolina,
North Dakota,  Ohio,  Oklahoma,  Oregon.
Pennsylvania,  Rhode Island,  Rockwall,
South Carolina, South Dakota, Tennessee,
Texas,  Utah, Vermont,  Virginia,
West Virginia, Wisconsin, Wyoming,
British Columbia, Alberta, Saskatchewan,
Manitoba, Ontario, Quebec City,
New Brunswick, Prince Edward Island,
Nova Scotia, Newfoundland, Yukon and
Northwest and Nunavit Territories,
Mount Vernon, Eumenclaw, Coos Bay
and Dallas Houston Rockwall Garland
Texas  Taxman and Tax Guru  and wizzard
wizard - consultant - expert - advisor -advisors consultants - gurus - Paris
Prague Moscow Berlin
Lima Rio de Janeiro, Santaigo
New York, Boston, Sacramento, Minneapolis, Salem, Wheeling, Philadelphia,
Pittsburgh, Atlanta, Pensacola, Miami, St Petersburg, Naples, Fort Myers,
Cape Coral, Orlando, Atlanta, Arlington, Washington, Hudson, Green Bay,
Minot, Portland, Seattle, St John, St John's, Fredericton, Quebec, Moncton,
Truro, Atlanta, Charleston, San Francisco, Los Angeles, San Diego,
Sacramento, Taos, Grand Canyon, Reno, Las Vegas, Phoenix, Sun City, Tulsa,
Monteray, Carmel, Morgantown, Bemidji, Sandpointe, Pocatello, Bellingham,
Custer, Grand Forks, Lead, Rapid City, Mitchell, Kansas City, Lawrence,
Houston, Albany, Framingham, Cambridge, London, Paris, Prince George, Prince
Rupert, Whitehorse, Anchorage, Fairbanks, Frankfurt, The Hague, Lisbon,
Madrid, Atlanta, Myrtle Beach, Key West, Cape Coral, Fort Meyers,   Berlin,
Hamburg
Warsaw, Auckland, Wellington, Honolulu, Maui, Kuwait, Molokai, Beijing,
Shanghai, Tokyo, Manilla, Kent, Winnipeg, Saskatoon, Regina, Red Deer, Olds,
Medicine Hat, Lethbridge, Moose Jaw, Brandon, Portage La Prairie, Davidson,
Craik, Edmonton, Calgary, Victoria, Vancouver, Burnaby, Surrey, Edinburgh,
Dublin, Belfast, Glasgow, Copenhagen, Oslo, Munich, Sydney, Nanaimo,
Brisbane, Melbourne, Darwin, Perth, Athens, Rome, Berne, Zurich, Kyoto,
Nanking, Rio De Janeiro, Brasilia, Colombo, Buenos Aries, Squamish,
Churchill, Lima, Santiago, Abbotsford, Cologne, Yorkshire, Hope, Penticton,
Kelowna, Vernon, Fort MacLeod, Deer Lodge, Springfield, St Louis, Centralia,
Bradford, Stratford on Avon, Niagara Falls, Atlin, Fort Nelson, Fort St
James, Red Deer, Drumheller, Fortune, Red Bank, Marystown, Cape Spears,
Truro, Charlottetown, Summerside, Niagara Falls, Albany STAR WARS
international non-resident cross border income tax help assistance expert
preparation & immigration consultant david ingram, experts on rentals mutual
funds RRSP RESP IRA 401(K) & divorce preparer preparers consultants

Trackback

Trackback URL for this entry: http://www.centa.com/trackback.php/UsCaWeekofMon20060109002307.html

No trackback comments for this entry.

0 comments