Should I Keep My US Brokerage Account After Moving to Canada? Yes If They Will Keep You — Here Is the Full Picture

Keeping the US brokerage account is usually the right instinct: US-listed securities are exactly what an American in Canada should own (no PFIC problems, deep markets, low fees), and Canadian tax law has no objection to a resident holding a US account. The obstacles come from elsewhere. First, the broker: US securities regulations make many brokerages unwilling to service accounts with Canadian addresses — some freeze trading (hold and sell only), some close accounts, a few serve Canadian residents properly. The account's future should be confirmed before the move, not discovered after. Second, the bookkeeping: from the residency date, Canada taxes the account's dividends, interest, and gains — with cost bases reset to fair market value at arrival (the newcomer step-up), tracked thereafter in Canadian dollars under Canadian rules (average cost across identical property, superficial loss rules), which means the broker's US-dollar, US-method gain reports are wrong for the T1 from day one. Third, the reporting: a US brokerage account is specified foreign property — if total cost of foreign property exceeds C$100,000, Form T1135 files annually. None of this argues for moving the money to Canada; it argues for keeping the account with the right custodian and running a Canadian ledger next to it.

Key takeaways

• Confirm the custodian first: ask directly whether they service Canadian-resident retail accounts. Cross-border-oriented custodians and advisors exist; a forced liquidation because the broker mailed a restriction letter is a tax event chosen by no one.
• Arrival step-up: every security's Canadian cost base is its fair market value on the residency date — save that day's statement permanently. Only gains accruing after arrival are Canadian-taxable; the US, for its citizen, still taxes the full historic gain, which is why realizing big winners before the move is standard planning.
• The annual Canadian ledger: income and gains converted at Bank of Canada rates; ACB averaged per Canadian rules; currency itself is an asset (FX gains on US-dollar cash above the small exemption are taxable). The 1099 is an input, never the answer.
• T1135: the account counts toward the C$100,000 specified-foreign-property threshold (registered US retirement plans do not); first-year newcomers are exempt, then it files annually — the simplified method under C$250,000, the detailed method above.
• What to hold where: US-listed ETFs and stocks in the US account (US-source dividends carry 15% US withholding for the Canadian side to credit — and for a US citizen the credit mechanics run through both returns); avoid buying Canadian mutual funds in Canadian accounts (PFICs); Canadian-listed holdings, if wanted, sit better in Canadian accounts for withholding cleanliness.
• Estate note for later: US-situs securities feed the US estate tax analysis for a non-citizen spouse and the probate map — worth a look once balances are large, not a reason to relocate assets on day one.

The pre-move trade review

The weeks before the residency date are the free window: gains realized then are US-only (long-term rates, no Canadian tax ever, and the arrival step-up bakes in the new basis), while losses are usually better saved (post-arrival, they offset Canadian gains too, subject to each country's rules). A deliberate pre-move harvest of the winners is the single highest-value account action in most moves — after it, the account can cross the border quietly.

Worked example

A software manager moves from Denver to Vancouver on September 1 with a US$480,000 taxable account at a mainstream US brokerage: US$300,000 of index ETFs (US$140,000 unrealized gain) and US$180,000 of employer stock (US$60,000 gain). July: her brokerage confirms it restricts Canadian-resident accounts to liquidation-only; she opens with a cross-border custodian and transfers in kind. August: she sells the employer stock — US-only tax on the US$60,000 at long-term rates, Colorado's part-year return catching it, Canada uninvolved — and holds the ETFs. September 1: statement saved; the ETFs' Canadian ACB is that day's value in CAD. Ongoing: dividends go on both returns with the withholding credited; her T1135 starts in year two (newcomer exemption covers year one) on the detailed method; her Canadian ledger tracks ACB in CAD while the 1099 keeps US books. The account she almost opened instead — a Canadian mutual fund portfolio "to simplify things" — would have simplified nothing and added a Form 8621 per fund per year.

Official sources

The CRA sets out the penalties for failing to file Form T1135: $25 per day to a maximum of $2,500; where the failure is made knowingly or under circumstances amounting to gross negligence, $500 per month to a maximum of $12,000; and after a demand, $1,000 per month to a maximum of $24,000; plus an additional penalty where the form is more than 24 months late. — Canada Revenue Agency, Foreign Income Verification Statement – Penalties, https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/foreign-reporting/penalties.html

The IRS explains the tax treatment of capital gains and losses, including the distinction between short-term and long-term gains and the preferential rates that apply to net long-term capital gains. — Internal Revenue Service, Topic No. 409, Capital Gains and Losses, https://www.irs.gov/taxtopics/tc409

Practitioner note

Brokerage accounts fail movers administratively, not tax-wise: the broker's restriction letter and the missing arrival-date statement cause more damage than any rule in either code. Two actions before the move close both risks — confirm the custodian in writing, and save the residency-date valuation — and the third, harvesting the winners while only one country is watching, is where the actual money is.

See also: Browse every cross-border tax topic guide, organized by situation.

Next step

Fairlight prepares the investment account transition — custodian confirmation, the pre-move gain harvest, arrival valuations, and the annual Canadian ledger with T1135. See cross-border pricing or book a call.