My son, who is a US citizen living and working Canada. Just sold a piece of property which he inherited in the US. The capital gains was $160,000 and US Federal and State capital gains taxes came to about $28,000

He is now being told by his Canadian Tax preparer that he also owes ~$20,000 Canadian capital gains taxes. The money from this sale will remain in the US and is not expected to go into Canada any time soon if ever. I thought I had read that the capital gains is not taxable in Canada until it is brought into Canada.

Can someone comment on this? Seems incredibly unfair to get hit like this in both countries.
Thanks for any information you can send this way,


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    Tax has nothing to do with whether it is brought into a country or not- it's worldwide income, same as the US. The usual result with a tax treaty is that you end up paying the higher rate of the two countries, definitely not double taxed. Sounds like his tax preparer may not be well versed on cross-border issues, and it might be worth talking to an actual accountant. Apr 27, 2016 at 16:37

1 Answer 1


Residents of Canada must pay Canadian income tax on their worldwide income (source: Wikipedia). However, there is a tax treaty between the U.S. and Canada; I haven't read it, but my guess is that it will allow you to claim a tax credit in Canada for the capital gains tax you have paid to the U.S.

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