Clients between Canada and the US: two cost bases, lots and year-end

A client who moved from the US to Canada, or a US citizen living here, answers to two tax systems that count the cost of the same shares differently. Borderfolio replays both from the same confirmed trades: the Canadian adjusted cost base, reset to the value on arrival, and the US lots in dollars. It then screens what each country asks of the client and lists every sale the way each return needs it.

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What gets in the way

One set of trades, two costs. Canada averages identical shares across the person’s non-registered accounts, in Canadian dollars; the US keeps each purchase as a lot, account by account, in US dollars. Each conversion uses the rate of its own date, so neither figure can be derived from the other.
The move resets one of them. On becoming resident in Canada, most property is taken to be acquired at its fair market value that day; the US cost does not change.
Accounts one country shelters and the other does not. A TFSA is tax-free in Canada, but no treaty article or IRS guidance recognises it for a US person. US tax on an RRSP, by contrast, is deferred under the treaty.
Slips that disagree. A broker’s T5008 or 1099-B reflects that broker’s own records, not the person’s average cost across accounts or a value on arrival.

Clients who moved to Canada

Value on arrival. For each holding owned on the arrival date, you enter its market value from the statement for that day, in any currency; it is converted at that day’s reference rate, and the Canadian cost restarts there. Without an entry the holding reads “value on arrival”, never a guessed figure. See the cost base step-up on arrival.
The lots held at the move. When the US broker or the client can give the open lots rather than years of statements, they come in as a lot file (CSV or XLSX: ticker or ISIN, acquired date, quantity and cost). Each lot becomes a purchase at its own date and cost, the lots plus later trades are checked against today’s holding, and a lot that would count shares twice is held back rather than merged.
US retirement accounts. An IRA, 401(k) or Roth IRA brought to Canada, with the one-time treaty election for a Roth and its deadline. See IRA, Roth IRA and 401(k) accounts for Canadian residents.
Leaving again. A planned move shows the deemed disposition on departure at today’s values, half of the gain taxable, with Forms T1243, T1161 and the optional T1244 election. See departure tax when a client leaves Canada.

US citizens living in Canada

Both bases side by side. Each holding in a taxable account with its cost and unrealised gain in CAD under the Canadian rule and in USD under the US rule, and a flag where one shows a gain and the other a loss.
Accounts the US does not shelter. A TFSA, FHSA, RESP or RDSP is counted as an ordinary account for US tax, labelled as our reading: no treaty article or IRS guidance recognises them. An RRSP or RRIF is left out under the treaty’s Article XVIII(7) deferral, which Rev. Proc. 2014-55 treats as elected for an eligible individual.
PFIC screen. Canadian-domiciled funds are listed as likely PFICs, generally reported on Form 8621 each year. A fund held in an RRSP or RRIF is not counted when the treaty deferral is in effect, under the exception for treaty pension arrangements in 26 CFR §1.1298-1(c)(4); applying it to an RRSP is labelled as a reading. The PFIC tax itself is not computed. See PFICs inside a TFSA or ISA.
Screens that do not apply. For a US person the W-8BEN and the non-resident estate-tax threshold are switched off, and the brief says why, instead of showing figures built for a non-resident.
Reporting thresholds. FBAR and Form 8938 tests from the accounts on file, with accounts at brokers that have US and non-US entities listed for checking.

Every sale, measured both ways

The client’s Cost basis tab holds the value on arrival, both bases side by side, the tax lots and the realised gains by year. Canada: each disposition as Schedule 3 lists it, at the average cost with the value on arrival applied, half of a gain taxable. United States: each sale split into the lots it took, first in, first out per account, with proceeds, cost, gain, short or long term, and the Form 8949 box as our reading of where the account is held, to confirm against the 1099-B. For each line you can record the figures from the client’s T5008 or 1099-B and see the difference against ours, with your reason for it. The worked example of one sale measured both ways is in cost basis in two currencies.

Year-end for the whole firm

The Year-end page runs the same calculation for every active client with accounts and lists each client who sold in the tax year: the Canadian total, the US short- and long-term totals, and a status. A client is complete when every sale has a known cost; otherwise the page says what is missing, in order: a value on arrival, a gap in the history, an opening balance, an unknown cost. A total is shown only when every sale behind it is known. The export is one ZIP: an index and each client’s Schedule 3 and Form 8949 CSVs, the same files the client’s Cost basis tab exports. A review generated for a client with sales prints the realised gains of the last year and the current year so far.

How the data gets in

Statements as PDF, CSV, XLSX or images: Interactive Brokers Flex and Schwab exports are read by format-specific parsers; Questrade, Wealthsimple and other statements go through an extraction model. Every import opens for your review before anything is confirmed. See importing statements.
An Interactive Brokers account can instead be synced daily through a read-only Flex connection.
A lot file for the lots held at a move, as above.
A secure upload link lets a client or prospect send statements without opening an account.

Where it stops

No custodian or back-office feeds: data arrives through statements, the Interactive Brokers connection, a lot file or hand entry.
Not modelled: specifically identified lots and broker lot elections, the wash-sale rule (IRC §1091), gains on the currency itself (IRC §988), and Form 3520 or Form 8621 reporting on a TFSA or RESP.
Returns are not prepared and no tax is computed on the US side; the CSVs support the accountant’s work, they do not fill in the forms.
Readings of the treaty are labelled as such; a client whose plan does not meet the stated conditions (for example the Rev. Proc. 2014-55 eligibility) needs their US tax adviser’s view.

Sources

Income Tax Act s.128.1 (change of residence), s.54 and s.53 (superficial loss, adjustments to cost base), s.38 (taxable capital gain); CRA guide T4037, Capital Gains; CRA, dispositions of property on leaving Canada.
26 CFR §1.1012-1(c) (first in, first out when lots are not identified); IRC §1222 (short and long term); IRS Instructions for Form 8949.
Canada–US tax convention, consolidated text, Article XVIII(7); IRS Rev. Proc. 2014-55.
IRC §1297 (PFIC); 26 CFR §1.1298-1(c)(4); IRS Instructions for Form 8621.

Last updated 5 November 2026. Describes the product as built; figures are screening estimates for professional review, not tax, legal or investment advice.