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From January to August 2010 I worked in the USA and then I moved to Canada where I'm a student. Do I file an income tax return in Canada, USA or both? (If Canada, how do I get all of the deductions that I paid in the US back?)

Also, I bought stocks in March of 2010 and made some unrealized capital again. How do I minimize the capital gains tax I eventually pay on those stocks? Can I sell them in March, pay $0 capital gains tax next year (having held them for one year) and rebuy the same stocks in Canada?

  • Are you a US citizen or greencard holder? – Timo Geusch Feb 4 '11 at 22:08
  • No, I'm Canadian. I was on TN visas for 3 years. – Neil G Feb 4 '11 at 22:12
  • OK - the reason I asked was that as a US citizen (and to a certain extent as a GC holder), you'd have to file a tax return on your worldwide with the IRS even if you're not living in the US. Can't help past that. – Timo Geusch Feb 4 '11 at 22:26
  • @Timo, yes, thanks, I'm aware of that requirement. – Neil G Feb 4 '11 at 22:28
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I'll attempt to answer this from the Canadian perspective. I would suggest that you consider filing a tax return in Canada since you are a Canadian citizen and if you're now a student, you can likely claim or carry forward tuition and education amounts. With respect to your foreign income, you would declare it on line 104. Foreign tax withheld may be claimed on line 405 using form T2209. Canada and the US have a tax treaty and I have used the T2209 in the past to deduct foreign dividend tax withheld from US investments.

As for the US return, if they have similar residency conditions, I don't see why you wouldn't need to fill it out. I can't help you with that or your capital gains question.

  • @Neil: Out of curiosity, I've read some more about filing taxes for US-Canada taxes in the past few hours. The final thing I would suggest is going to an accountant that has experience with both tax systems and optimizing your tax situation by taking advantage of each country's residency requirements. – fideli Feb 8 '11 at 9:29

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