U.S. Tax Relief for Canadians Emigrating to the United States


Canadians moving from Canada to permanently settle in the United States should take note of recent Internal Revenue Service (“IRS”) guidance providing relief from U.S. federal income taxation. Individuals emigrating from Canada to the United States are subject to Canada’s departure tax as if the Canadian resident had disposed of all their capital property for fair market value immediately prior to their departure from Canada (the “Departure Tax”). Thereafter, when the individuals subsequently sell such property, the United States will impose a federal income tax upon the gain from the actual sales price over the original basis.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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