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Stock trading after moving to Canada - Taxation issues

Stock trading after moving to Canada - Taxation issues

Old Jul 1st 2005, 4:31 am
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Default Stock trading after moving to Canada - Taxation issues

Greetings everybody,

What are the tax concerns for a person trading on a US account like Ameritrade but residing in Canada? Does he/she have to pay tax both in the US and Canada :scared: on gains got out of say swing/day trades?

Thanks in advance for your replies
Kudla
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Old Jul 1st 2005, 5:49 am
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Default Re: Stock trading after moving to Canada - Taxation issues

Originally Posted by subash_karkera
Greetings everybody,

What are the tax concerns for a person trading on a US account like Ameritrade but residing in Canada? Does he/she have to pay tax both in the US and Canada :scared: on gains got out of say swing/day trades?

Thanks in advance for your replies
Kudla
All gains made worldwide are to be added on your taxable income :scared:
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Old Jul 1st 2005, 5:51 am
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Default Re: Stock trading after moving to Canada - Taxation issues

There are several important issues that you should be aware of and you should discuss details with cross border tax expert like http://serbinski.com/

But I can tell you some basics. First - all your capital property will have new cost basis (their fair market value or price on the day of landing) as of the day of your landing for Canadian tax purposes and all your future gain or loss will be later calculated from that cost basis. It applies to stocks, real estate, deposits, all capital property, regardless where it is.

Second - trading through US based online brokers has great advantage for Canadians and you should change your account to a non-resident (in US) one after you move here. Why? When I started my accounts (both bank and trade) in US while being a Canadian residing in Canada I had to sign a special declaration that I'll be responsible for reporting and paying my own taxes - this way US banks and brokers don't withhold any taxes from interest earned from deposits or profits made from each trade as I have to report it in Canada myself. It is quite good especially with trading - this way all your money work, not only net profit after taxes.

But again - above are just some of very bare basics and you should talk to expert and do proper planning before moving.

Originally Posted by subash_karkera
Greetings everybody,

What are the tax concerns for a person trading on a US account like Ameritrade but residing in Canada? Does he/she have to pay tax both in the US and Canada :scared: on gains got out of say swing/day trades?

Thanks in advance for your replies
Kudla
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Old Jul 1st 2005, 6:09 am
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Default Re: Stock trading after moving to Canada - Taxation issues

Dear Andrew,

Thank you for the helpful information. I am still a little fuzzy with regards to reporting of taxes. Am I correct in thinking that I need to report gains and losses to both Canada and US? Will I need to pay both countries tax on the gains and file returns for losses every year? If 'yes' whats the advantage of making my US trading/bank accounts as non-resident then? I am currently in US, planning on immigrating to Canada (I already have a PR) sometime early next year.

Andrew, as always your reply is appreciated much.

Thank you
Kudla

[There are several important issues that you should be aware of and you should discuss details with cross border tax expert like http://serbinski.com/

But I can tell you some basics. First - all your capital property will have new cost basis (their fair market value or price on the day of landing) as of the day of your landing for Canadian tax purposes and all your future gain or loss will be later calculated from that cost basis. It applies to stocks, real estate, deposits, all capital property, regardless where it is.

Second - trading through US based online brokers has great advantage for Canadians and you should change your account to a non-resident (in US) one after you move here. Why? When I started my accounts (both bank and trade) in US while being a Canadian residing in Canada I had to sign a special declaration that I'll be responsible for reporting and paying my own taxes - this way US banks and brokers don't withhold any taxes from interest earned from deposits or profits made from each trade as I have to report it in Canada myself. It is quite good especially with trading - this way all your money work, not only net profit after taxes.

But again - above are just some of very bare basics and you should talk to expert and do proper planning before moving.
]
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Old Jul 1st 2005, 6:49 am
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Default Re: Stock trading after moving to Canada - Taxation issues

There is a tax treaty between US and Canada dealing with taxation of capital gains and losses - this is why my US bank and US based broker don't withhold any taxes from me. Please talk to expert as soon as possible - some things may require longer preparation and change in your investment strategy.

[QUOTE=subash_karkera]Dear Andrew,

Thank you for the helpful information. I am still a little fuzzy with regards to reporting of taxes. Am I correct in thinking that I need to report gains and losses to both Canada and US? Will I need to pay both countries tax on the gains and file returns for losses every year? If 'yes' whats the advantage of making my US trading/bank accounts as non-resident then? I am currently in US, planning on immigrating to Canada (I already have a PR) sometime early next year.

Andrew, as always your reply is appreciated much.

Thank you
Kudla
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