Moving back to Canada

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LotusHeart
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Moving back to Canada

Post by LotusHeart »

I am a Canadian citizen living in US.

I plan to move back to Canada in a few years but I heard that if I do, I have to pay taxes on all my assets amassed in US.

Is that true? If yes, at what rates?

If someone recently moved back from US to Canada, please kindly share your experiences.

Thanks!
OhGreatGuru
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Re: Moving back to Canada

Post by OhGreatGuru »

It is possible (likely?) that you will have to pay capital gains tax to the US IRS based on a deemed disposition of your assets on your date of departure. Certainly, Canada does this for people leaving Canada. Your adjusted cost base going forward is the asset valuation on the date of entry, from the point of view of Canadian taxes.
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AltaRed
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Re: Moving back to Canada

Post by AltaRed »

It is important to document (paper record) the market value of your individual assets on the day of entry into Canada. This forms the Cost Basis of your assets on a 'go forward' basis from a Canadian taxation point of view from that day forward.

At the current time, Canadian capital gains taxes are taxed at half the rate of normal taxation, normally referred to as the 50% inclusion rate.

You may wish to consider crystallizing any capital losses you have on current assets, as an offset to capital gains, where and as permitted by the IRS before returning to Canada. Canada won't recognize those capital losses because CRA only looks on a 'go forward' basis as per my first comment.

As OGG mentioned, better check US tax law for any gains you've accumulated on your assets while a tax resident of the USA. That could be a deemed disposition from an IRS perspective. I forget how that worked when I returned to Canada in 2006 from an ex-pat assignment. Too long ago for my brain to remember that.
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