Calgary to Los Angeles: Energy, Entertainment, and a Rare Corridor Where the Bill Can Go Up

Calgary to Los Angeles is one of the few Canadian moves where the income tax rate can rise. Alberta's combined top rate of about 48% is the lowest in Canada; California's combined federal and state top rate is about 50.3%, with capital gains taxed as ordinary income and the RRSP taxed annually. The move is about the job, and the planning is about the RRSP and the gain realization before departure.

Key takeaways

• Alberta's roughly 48% top rate sets the departure tax. On a $300,000 unrealized gain, about $72,000.
• California's combined top rate is about 50.3%; capital gains at ordinary rates.
• California does not follow the treaty on RRSPs: the account's annual earnings are taxable on the California return.
• Alberta's 5% GST becomes 9.5% sales tax in most of Los Angeles County.
• AHCIP ends on permanent departure.

The Alberta departure

Departure tax applies to non-registered investments, private company shares, crypto, and foreign property at fair market value on the departure date. Alberta real estate, RRSPs, TFSAs, and pensions are excluded. Report on Form T1243, list holdings on Form T1161 if the total exceeds $25,000. Because California taxes post-arrival gains at ordinary rates on the full amount, realizing gains before departure at Alberta's half inclusion and 48% is often cheaper. A Calgary corporation is deemed sold and becomes a US controlled foreign corporation; wind it up before you go.

Los Angeles's side

Graduated state rates to 12.3% plus a 1% surcharge above $1 million, for a combined federal and state top rate near 50.3%; capital gains taxed as ordinary income; 9.5% sales tax in most of Los Angeles County, up to 10.25% in some cities; Proposition 13 property tax at about 1.1% of purchase price with a 2% annual cap; no estate tax; aggressive residency audits; community property. The City of Los Angeles also levies a gross-receipts business tax that applies to freelancers and independent contractors from the first dollar of revenue earned in the city.

The RRSP in California

Federally deferred under Article XVIII of the treaty. California does not conform: the Franchise Tax Board taxes the interest, dividends, and realized gains inside the account each year. Before departure, restructure toward growth assets that produce little annual income, draw the account down while still a Canadian resident, or accept the annual inclusion and track California basis.

Who makes this move

Calgary energy professionals to Los Angeles's clean-energy and utility sector, Alberta engineers to Southern California's aerospace and defence employers, and Calgary film and media professionals to the entertainment industry.

Worked example

A Calgary engineer moves to Los Angeles on June 30 with $250,000 of unrealized gain in a non-registered account, $500,000 in an RRSP producing about $15,000 a year of income, and a professional corporation wound up before departure.

• Departure tax. $250,000 gain, $125,000 taxable, at about 48%: roughly $60,000. Cheaper than California's ordinary-rate treatment later.
• RRSP. Federally deferred. California taxes the $15,000 annual income at rates up to 13.3%; restructuring toward growth equities reduces it.
• Corporation. Capital dividend account paid and wound up as an Alberta resident.
• Los Angeles. Combined top rate about 50.3%, a slight increase from Alberta. GST 5% becomes sales tax 9.5%.

Official sources

"When you leave Canada, you are considered to have sold certain types of property (even if you have not sold them) at their fair market value (FMV) and to have immediately reacquired them for the same amount. This is called a deemed disposition and you may have to report a capital gain (also known as departure tax)." — Canada Revenue Agency, Leaving Canada (emigrants), https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/leaving-canada-emigrants.html

California does not conform to federal tax treaty provisions; income excluded from federal income under a treaty may be taxable by California. — California Franchise Tax Board, Publication 1031, Guidelines for Determining Resident Status, https://www.ftb.ca.gov/forms/2025/2025-1031-publication.pdf

Alberta's top personal income tax bracket: "15%" on "$362,961.01 and up" (2025). — Government of Alberta, Personal income tax, https://www.alberta.ca/personal-income-tax

Practitioner note

Alberta-to-California is the file where we most often recommend paying more Canadian tax on purpose: realizing gains and drawing down the RRSP in Alberta rather than carrying them into a state that taxes gains at ordinary rates and RRSP earnings annually.

See also: Weighing Florida instead? See the Canada-to-Florida guide, or the same city's Calgary to Miami guide.

Next step

Fairlight prepares the Alberta departure return, the RRSP restructuring, and the first-year federal and California returns for Los Angeles clients. See cross-border pricing or book a call.