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MessageIt amazes me how something as basic as this can slip by me
for three years. You snooze you lose. I listened to a national
open line program last Saturday where the expert had missed it as
well. And just to check myself, I phoned three mutual fund RRSP
people and asked them and they still thought the paper sale was
important. Have put them on the list as well. Thanks Again
Andrew. That's two today. But it is also what keeps this
information up to date. No one person can possibly do it alone.
david ingram
===============================================
David,
As of Sept. 18, 2000 US allows former cdn residents to use the
"deemed disposition" value as the new cost base for any future
capital gains calculations arising in US.
This avoids the need for these paper sales just before departure.
It will be part of the next treaty ratification, but IS IN EFFECT
NOW (Since Sept 18, 2000)
I can locate the Dept. of Treasury or Ministry of Finance links
on this if you would like.
Here's one:
http://www.fin.gc.ca/news00/00-068e.html
Here's the other:
http://www.ustreas.gov/press/releases/ls883.htm
These are in effect RIGHT NOW!!
Thus, a cdn leaving Canada after Sept 18, 2000 has a choice as to
the cost basis when eventually selling an investment: either the
original cost basis or the deemed disposition value (which ever
is highest, of course).
Andrew
-----Original Message-----
From: [email protected]
[mailto:[email protected]]
Sent: Tuesday, January 27, 2004 02:57
To: CENTAPEDE
Subject: Canadians move from BC to California on
L1 Visa
QUESTION:
When moving from BC, Canada to California, USA we understand
from meeting
with you that there will be Canadian departure tax on capital
gains accrued
to the date of departure. Upon subsequent sale of investment
we also
understand that California and Federally the gain will be
calculated based
on the actual original cost. For purposes of determing whether
it will be
treated as a capital gain (i.e. held > 1 yr) or as income (held
< 1 yr) does
the US and California look to the original purchase date or to
date of
becoming US tax payer? Upon sale of a publically traded
security purchased
as a Cdn resident and sold after becoming a US resident, are we
required to
report on both a Cdn and US tax return or just on a US return?
=================================================================
=
david ingram replies:
The US will tax you from the purchase date. That is why you
should sell and reacquire your holdings the day before you leave
Canada does not tax that publicly traded share if sold when you
are now in the US AND you paid the departure tax.
If you have filed form T1243 to defer the tax, you WILL pay tax
to Canada on the sale in the US but it will be the original
calculated departure tax, not the actual profit or loss on the
date of sale.
Canada does not treat your sale and repurchase as an actual
sale unless there is a 30 day gap between the sale and
reacquisition. The US will, however, treat the reacquisition
price as the cost price.
David Ingram's US/Canada Services
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Calls accepted from 10 AM to 10 PM 7 days a week
Res (604) 980-3578 Cell (604) 657-8451
Bus (604) 980-0321
[email protected]
www.centa.com www.david-ingram.com
Disclaimer: This question has been answered without detailed
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