Scenario: Individual A moves to Toronto as a permanent resident via express entry while retaining U.S. citizenship. They will only open a Canadian bank account and an account with a Canadian based crypto exchange. Those are the only two reporting assets they will have.
Let’s say after 10 years of investing money into a crypto account that individual A accumulates $1,000,000 CAD in capital gains. Then let’s say that Individual A on the 10th year is living in Canada and making $100,000 CAD per year.
What will be the tax obligations in selling the $1,000,000 capital gains from both the Canadian and U.S. side?
Would this estimation be right? This is the Canadian side:
Thanks everybody!
Let’s say after 10 years of investing money into a crypto account that individual A accumulates $1,000,000 CAD in capital gains. Then let’s say that Individual A on the 10th year is living in Canada and making $100,000 CAD per year.
What will be the tax obligations in selling the $1,000,000 capital gains from both the Canadian and U.S. side?
Would this estimation be right? This is the Canadian side:
- 50% of 1,000,000 = $500,000 CAD
- $100,000 CAD + $500,000 CAD = $600,000 CAD
- $600,000 CAD @ 33 percent = $198,000 CAD
- $600,000 CAD @ 13 percent (Ontario tax) = $78,000 CAD
- Total: $276,000 CAD
- $785,550 (Used converter calculator to USD)
- $785,550 - $107,600 (foreign earned income exclusion) = $677,950 USD
- $677,950 @ 20 percent = $135,590 USD
Thanks everybody!