Returning to Canada, what to expect at the boarder

[Dr.DNA]

I am currently in the USA working on a TN and I will be moving back to Canada in a few weeks (my contract has ended). What kind of headaches and forms will I need to leave the US and re-enter Canada? Do I need a Departure Permit? Any fees?

[Steven]

You need to complete and present CBSA forms B4 and B4A at the POE for any personal effects you will be bringing back with you, whether accompanied or arriving later.

Whether you need to file anything in the US depends on what you're bringing back with you and what your tax status is.

If you've been filing as a non-resident you simply file as a non-resident for 2008 and that's the end of it. If you filed as a resident (on 1040) it's very complex as you have to file a ton of paperwork to move your tax home back to Canada (but you can mail it from Canada obviously after you leave).

If you're bringing back a vehicle you acquired in the US you will need to formally import it, have a look at www.riv.ca

There is no duty or other taxes to pay on anything imported as personal effects, including vehicles.

[corbot]

On a somewhat related issue, my wife and I were in the US for a few years under TN visas and returned home this year. We filed as 1040-NR and only rented while in the states. The move back went well as far as the vehicles (pretty much what was discribed in these forums). The one question that I have is around the tax implications of moving our investment accounts back. I thought I had read something somewhere that even if you transferred the portfolios from a US brokerage to a Canadian one, that it was deemed that you had sold them on your moving date and that capital gains would be triggered at that point on any profits. How far off am I? My local tax guy (who admits he isn't an expert in this area) didn't think that this was the case.

As it turns out I had a lot of difficulty trying to get the stocks in my portfolio moved across and ended up liquidating them in my US brokerage and transferring the cash (a few months after our return). How do you think this will play out on our returns?

A second question has to do with a 401K account (~$37,000) and a small IRA (< $3000) that I had opened up while in the US. Is it prudent to move these back or should these be left in the states. We're in our late 40's and don't anticipate needing to access that money until we are retired (we can easily wait until we get to the appropriate withdrawal ages).

[Steven]

This is a tricky issue and for a definite answer the only way is to contact the IRS and the CRA next year when you're doing your returns.

The reason why is the tax treaty changed at the start of this year. If you remove money from an IRA, RRSP, etc. the money is subject to income tax so it's generally not a good idea to do that.

Under the new treaty, distributions inside the account are also not subject to income tax so the best advice is to simply leave it. In the US there is a form (8891) you have to use to declare an RRSP, I assume there is a Canadian equivalent to declare IRAs/401(k)s with your T1.