Using the EB-5 Visa to move from Canada to the USA?

 Tax Alert

The IRS has issued Revenue Procedure 2010-19 (“Deemed Dispositions by Individuals Emigrating from Canada”).The Revenue Procedure provides guidance on the new election procedure provided under the Fifth Protocol of the Canada/US tax treaty whereby individuals moving from Canada to the United States can elect an increased cost basis on their property for US income tax purposes.
 
Among other things, the Revenue Procedure describes the deadlines and procedures for making the election.   In addition to other factors, distinctions are made:
 

1. For emigrations before March 29, 2010 and thereafter,
2. Between US citizens and nonresident aliens, and
3. Property that would have been subject to US tax on the ultimate sale, regardless of the emigration.

 
In many cases the individual must make the election on the individual’s timely filed US federal income tax return for the first year ending after the individual’s change of residence.Some elections may be time-barred under the statute of limitations.

Our thanks to International tax specialist Richard Brunton for this alert.