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Moving investments from US to Canada

Hi All,

I wanted to get some thoughts on what folks did with their investments in the US, before moving to Canada

  1. Did you transfer the investments to Canadian brokerage account?
  2. What did you do with RSUs that were yet to vest? This is considering you continue working with the same employer remotely.
  3. What did you do with 401k? I currently have my 401k in an employer sponsored Fidelity account. Does it have to be rolled out to an IRA?
  4. How did you bring the cash in US bank accounts to Canada?
  5. What happens to your US bank accounts once you move?
  6. Any tax implications we should be aware of?

Thanks in advance for your input!

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Hi all - I have similar question as well. I read through some other threads and my understanding is that bank accounts are generally fine with Cad address, however for brokerage you need to liquidate. Is that true ? Would be great if someone helps with above questions. @sohran10 thanks for asking.

Hi @ck_2020 ! We moved to Vancouver recently. What we found out was this -

  1. You can generally keep US bank accounts as is. BofA and Chase atleast do allow that.
  2. For brokerage, if you live outside the US, the Sale for your investments freezes. Meaning, if you want to sell the investments, you need to call the brokerage and get it done. You cannot do it yourself. Hence we decided to open a brokerage account in Canada, and then transfer all of our investments here. The transfer happens as is. It is not treated as a sale in the US and re-purchase in Canada.

Hope that helped. Let me know if you have more questions.

Hi @sohran10: Thanks for the inputs. Very helpful. 2 quick clarifications.

  1. When you say “sale of investment freezes”, does that mean both “buying & selling” of stocks freezes (or just sellng). Like, what if I don’t want to liquidate the stocks, but just add more to my portfolio, let’s say if FANG stocks go low, can I do that ?

  2. Transferring investments, is it like opening a a Scottrade account from Canada and then transferring full portfolio “as is”, such that dollar values will reflect CAD and then you essentially operate it as they way you would do in US previously ?

Thanks !

What happens to the cost basis for your investments in case of a transfer?

I’m curious to know how you’d calculate your capital gains when you sell some of the assets that you transferred?

On the 401 K topic, this is something I had come across some time back. Sharing in case it helps… https://www.youtube.com/watch?v=XeL3yjqnYZU

Don’t think ‘sale of investment freezes’ is the right interpretation of what happens here.

If you are a Canadian resident (or any country other than USA), as long as you can provide a W8BEN to your brokerage, you should be able to sell all your stocks/investments held in brokerage accounts. Submitting this form is asking your brokerage to not withhold the mandatory 30% tax on your proceeds (RSUs, stocks, etc).

Thanks @aman. I am hoping I can leave the 401K as is, without transferring into any canadian savings. Isn’t that what normally people would do if they go back to India ? Like, don’t touch 401K and just letit continue.

It seems like an option, but need to check if you would incur any taxes on it. You will have to declare it as an asset, i think. I am not sure what people do when they move back to India either. Probably easier to find tax loopholes in India, might be harder with Canada and USA.

Ok. May be need to check a bit more in this. My guess is as long as you don’t cash out, one should be fine.

Apparently, the brokerage firm in the US simply tells the new brokerage firm in Canada the cost basis for each of the investments.

I also heard (not sure yet, so don’t quote me on this) that the new cost basis for these investments is essentially the price of that investment when it was transferred into Canada. The capital gains are calculated on top of that. So the gains you would have made while in the US are overlooked. Again, this is what I heard. So not very sure of how true it is.

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That is what folks told us to do as well. So we have left our 401k back in the US.

If this is true, then that is a sweet move indeed. You can save on thousands of dollars on Capital Gains with this method.

Oh, I wasn’t aware about this. This is definitely something to explore further for me.
I have kept most of my stocks/investments in the US brokerage account still, as my current employer (an american company with branch office in Canada) grants stocks in the same brokerage.

what brokerage is that ? TD ?

Can you share your source? Don’t get me wrong, it just sounds too good to be true, thats all :slight_smile:

Actually my company offered me a free tax briefing on Canada taxes before moving here. I found out there. But I am yet to actually do it, hence called it ‘hear n say’

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Should be any brokerage I guess. I think it’s a one-time benefit provided by CRA. The only caveat is you need to transfer assets within one year of moving, to avail this benefit, if I remember correctly from the tax briefing I had before coming here.

AFAIK, Cost basis for investments in the US is as of the day you became a Canadian PR i.e. the day u landed in Canada for the first time with ur CoPR