[goodheart36]

Hello Everyone:

I am a new member, so, if I posted this topic in the wrong discussion thread then I aplologize. You can tell me which discussion thread will be the right one, and I will repost.

I immigrated here 2 years ago. Previously I lived in the US (not my native country). After moving here, I am yet to start a salaried job. Most of the last 2 years I spent time in my native country where I visited after a long time.

I opened a trading account with a online trading broker last year and started investing in US Stocks. For the period of last year, I am at a loss. Basically I am living by and investing with the money that I saved working in the States.

My question is:

1) What tax is deducted from any profit from buying/ selling US Equities? If I have a loss last year, can I carryover to offset this years profit (in next years return)?

2) Will it be a good idea to purchase a Condo, even though I do not have any earned income? Note, I would purchase the condo with money I brought with me. Or is it better, to rent before I have a taxable earned income?

I would appreciate any insight into these matters as I have no clue what is the best course of action.

Thank you all.

[JohnNP]

goodheart36, on Oct 1 2009, 11:54 AM, said:

Hello Everyone:

I am a new member, so, if I posted this topic in the wrong discussion thread then I aplologize. You can tell me which discussion thread will be the right one, and I will repost.

I immigrated here 2 years ago. Previously I lived in the US (not my native country). After moving here, I am yet to start a salaried job. Most of the last 2 years I spent time in my native country where I visited after a long time.

I opened a trading account with a online trading broker last year and started investing in US Stocks. For the period of last year, I am at a loss. Basically I am living by and investing with the money that I saved working in the States.

My question is:

1) What tax is deducted from any profit from buying/ selling US Equities? If I have a loss last year, can I carryover to offset this years profit (in next years return)?

2) Will it be a good idea to purchase a Condo, even though I do not have any earned income? Note, I would purchase the condo with money I brought with me. Or is it better, to rent before I have a taxable earned income?

I would appreciate any insight into these matters as I have no clue what is the best course of action.

Thank you all.

It sounds like you have contravened canadian Tax Law by not reporting taxable income for the past two years.
In addition, you may have reporting issues to the IRS.

Since you are already far in arrears, there is not sufficient time for you to take tax study courses in basic tax for five years first, then a few more years in more specialized tax, since you are already overdue.

You dont mention whether you have dealt with the Tax Treaty issues in the first year (or in any year).

The relevant Tax Treaties may require you to file tax returns in your "native country" also.
Then you may have Foreign Tax Income and Credits issues involving three countries.

You need to engage a professionally qualified Accountant, who may also recommend working with a US CPA, if his/her practice does not include international taxation issies.

Ask your local Professional Accounting Association office for a referral to a professional accountant in your area.

A lot of professional accountants are also qualified/experienced in personal financial planning, so you should direct your PFP problems to them also, to analyse after they have fully investigated all or four personal and financial circumstances.


Otherwise, if you prefer not to get expert help, you can flip a coin for financial decisions, and wait for Tax audtors to catch up and audit (or worse) for the taxes.

[goodheart36]

JohnNP, on Oct 1 2009, 03:06 PM, said:

It sounds like you have contravened canadian Tax Law by not reporting taxable income for the past two years.
In addition, you may have reporting issues to the IRS.

Since you are already far in arrears, there is not sufficient time for you to take tax study courses in basic tax for five years first, since you are already overdue.

You need to engage a professionally qualified Accountant, who may also recommend working with a US CPA, if his/her practice does not include international taxation issies.

Ask your local Professional Accounting Association office for a referral to a professional accountant in your area.

JohnNP: Thank you for your quick reply. Note that I am not a US Resident (don't have a social security number). Also, I did not make a profit last year from my trading activities. I came here January last year.

[GuyL]

Broadly speaking (you will need to determine which tax authorities you need to deal with first):

1- In Canadian tax law, capital losses can be carried forward and applied against future capital gains of the same nature.

2- Whether you have earned income or not does not really have any bearing on the merits of buying a condo or renting. Unlike say the US, things like the interest paid on a mortgage are not tax deductible in Canada.

[goodheart36]

GuyL, on Oct 1 2009, 03:28 PM, said:

Broadly speaking (you will need to determine which tax authorities you need to deal with first):

1- In Canadian tax law, capital losses can be carried forward and applied against future capital gains of the same nature.

2- Whether you have earned income or not does not really have any bearing on the merits of buying a condo or renting. Unlike say the US, things like the interest paid on a mortgage are not tax deductible in Canada.

GuyL thank you for your response.

Please note, any Canadian can trade in any stock market in any country, not only in US markets, thru an online Discount Broker.

I am NOT a US resident/ Citizen. I am a Canadian Resident. My question is simple: If one trades in US Equities thru an online Canadian Stock Broker (such as BMO Investorline), whether one pays for the capital gains or gets benifit for the losses in their Canadian Tax Return?

[JohnNP]

goodheart36, on Oct 1 2009, 12:39 PM, said:

I am NOT a US resident/ Citizen. I am a Canadian Resident. My question is simple: If one trades in US Equities thru an online Canadian Stock Broker (such as BMO Investorline), whether one pays for the capital gains or gets benifit for the losses in their Canadian Tax Return?

Unfortunately it is clear that you misunderstand your tax responsibilities.
What you think is relevant is not in the way that you seem to think that it is.

I recommend not only a Professional Accountant, but one with especial Tax expertise in these areas.

You seem to be skipping over what the problems are that need to be resolved, and are under-estimating the expertise required to address and consider them. All of your circumstances need to be examined and analysed.

Please refer to my first post.


Sometimes QUESTIONS are simple, eg: "What is the meaning of Life, the Universe and Everything?"
It is the ANSWERS which are not so simple.

[GuyL]

JohnNP, on Oct 1 2009, 04:04 PM, said:

Sometimes QUESTIONS are simple, eg: "What is the meaning of Life, the Universe and Everything?"
It is the ANSWERS which are not so simple.

Actually it is quite easy: 42

[JohnNP]

GuyL, on Oct 1 2009, 01:20 PM, said:

Actually it is quite easy: 42

LOL
(But it took a few million years to compute) :)

[Marcello]

Why would you not be able to buy a condo with your money? If you rent you may need to prove your income. i.e. Job letter or pay stub. You will need to prove you income source to get a mortage as well. i.e. prior income tax returns, notice of asessments etc. I don't think they will give you a mortage based on online trading. They will want to see something more steady. Just my opinion.

Here is a good link to read on Capital Gains. http://www.cra-arc.g...37/t4037-e.html

This is just my opinion, try calling CRA. They are very helpfully. They will transfer you to the Capital Gains department. Just explain your situation.

If you are looking for a simple answer, you will not get it here. However your situation is more complex than most. I'm sure by reading the CRA link and speaking to CRA you will get the answers you are looking for. If you don't want to spend the time to educate yourself with this topic and you should since it is you main source of income, you can pay an accountant to do the thinking for you.

[Tim Parris]

goodheart36, on Oct 1 2009, 02:54 PM, said:

Hello Everyone:

I am a new member, so, if I posted this topic in the wrong discussion thread then I aplologize. You can tell me which discussion thread will be the right one, and I will repost.

I immigrated here 2 years ago. Previously I lived in the US (not my native country). After moving here, I am yet to start a salaried job. Most of the last 2 years I spent time in my native country where I visited after a long time.

I opened a trading account with a online trading broker last year and started investing in US Stocks. For the period of last year, I am at a loss. Basically I am living by and investing with the money that I saved working in the States.

My question is:

1) What tax is deducted from any profit from buying/ selling US Equities? If I have a loss last year, can I carryover to offset this years profit (in next years return)?

2) Will it be a good idea to purchase a Condo, even though I do not have any earned income? Note, I would purchase the condo with money I brought with me. Or is it better, to rent before I have a taxable earned income?

I would appreciate any insight into these matters as I have no clue what is the best course of action.

Thank you all.

These questions make sense from a new immigrant to the US which was your previous situation.

However, Canada uses a completely different set of rules. In the US, you were allowed to deduct interest from your personal residence against income. In Canada, you are not. For most jurisdictions in Canada, there is no impact whether you rent or own.

In the US, you were allowed to deduct up to $3,000 of your capital losses against other income. You were not required to file to make that deduction either. In Canada, you can only deduct the losses against your capital gains and are subject to number of additional rules. You are also required to file for the year when you made those losses.

In all, you are going down the wrong path and need professional advice. QuickTax is a tool but the problems which you are raising can not be handled by a software package. It only fills in the forms and you don't even know what field on the forms are needed let alone what forms. Most people who work the stock market get help for the taxes though there are a few who do the work themselves. But to immigrate and work in the stock market. That is complex.