TFSA & RRSP before moving to US

[HF & HB 6]

Hoping someone could confirm what I think to be correct regarding TFSAs closure and needing to declare interest on US taxes.

 

I closed my TFSA and converted it all in USD and placed all this into a non interest generating checking account a few months before moving to the US and getting married. My husband and I are planning to file Married Joint for 2019 (moved to US and married in July ). 

 

Since closing the TFSA the sum in USD has not generated any interest income so nothing to report there. When I closed the TFSA there was some interest generated I believe, do I report this on our US taxes? If so do I need to convert to amount into USD ?  at what exchange rate?

Also does the fact that I bought US currency before leaving Canada have any tax implications for the Canadian taxes? I read somewhere something about if you bought US currency and the exchange rates are now different (which probably they are) you have to see if there was a gain or something? I'm really confused since it seems like a lot of hassle for something that is just bringing my money with me when moving countries. However, I want to make sure I don't overlook anything or accidentally make a mistake on taxes.

 

Thanks for any input!

[jackanddeona 310]

On 3/3/2020 at 1:08 PM, HF & HB said:

Hoping someone could confirm what I think to be correct regarding TFSAs closure and needing to declare interest on US taxes.

 

I closed my TFSA and converted it all in USD and placed all this into a non interest generating checking account a few months before moving to the US and getting married. My husband and I are planning to file Married Joint for 2019 (moved to US and married in July ). 

 

Since closing the TFSA the sum in USD has not generated any interest income so nothing to report there. When I closed the TFSA there was some interest generated I believe, do I report this on our US taxes? If so do I need to convert to amount into USD ?  at what exchange rate?

Also does the fact that I bought US currency before leaving Canada have any tax implications for the Canadian taxes? I read somewhere something about if you bought US currency and the exchange rates are now different (which probably they are) you have to see if there was a gain or something? I'm really confused since it seems like a lot of hassle for something that is just bringing my money with me when moving countries. However, I want to make sure I don't overlook anything or accidentally make a mistake on taxes.

 

Thanks for any input!

I'm not 100% sure about the first question. As far as the 2nd question currency conversion follows the same capital gains/loss tax rules in canada as any other investment. You are only required to report it once you actually realize them by (in this case) transferring back to CAD. You also only need to report them if they are larger than 200$

 

So as an example you transferred 10k CAD to 7k USD. Fast forward and the value of your 7k USD is now 11k CAD. If you converted it back you would have to report the 1000$ capital gain but if you do not convert it then you recieved no capital gain so no report is necessary.

Edited March 7, 2020 by jackanddeona

[purem4g1c 113]

On 3/3/2020 at 3:08 PM, HF & HB said:

Hoping someone could confirm what I think to be correct regarding TFSAs closure and needing to declare interest on US taxes.

 

I closed my TFSA and converted it all in USD and placed all this into a non interest generating checking account a few months before moving to the US and getting married. My husband and I are planning to file Married Joint for 2019 (moved to US and married in July ). 

 

Since closing the TFSA the sum in USD has not generated any interest income so nothing to report there. When I closed the TFSA there was some interest generated I believe, do I report this on our US taxes? If so do I need to convert to amount into USD ?  at what exchange rate?

Also does the fact that I bought US currency before leaving Canada have any tax implications for the Canadian taxes? I read somewhere something about if you bought US currency and the exchange rates are now different (which probably they are) you have to see if there was a gain or something? I'm really confused since it seems like a lot of hassle for something that is just bringing my money with me when moving countries. However, I want to make sure I don't overlook anything or accidentally make a mistake on taxes.

 

Thanks for any input!

1) "Interest" Canada & USA have a tax treaty and you will only be taxed in ONE country for interest with no tax withheld.

 

2) Closing TFSA is fine as the money you earn in there would be taxed as if its a regular savings account in the USA.

 

3) you shouldn't be taxed on your USD since its your money that you're just transferring... unless you made a huge profit from changing CAD to USD which you probably won't, if anything you'll lose money due to fee's from the exchanger which you may be able to write off.

[HF & HB 6]

Thanks for the input and clarification!