I sell my house in Montreal and move to the US with a cashier’s check for $500,000 from the sale. I tell the border guard that I have such a check and where it came from. What happens next? Subsidiary question: what happens when I deposit the money in my bank account?
I don’t need the answer fast.
If the check is made out to you (as opposed to cash or bearer) and you haven’t endorsed it, you are not required to report it to US border authorities. I don’t know about Canadian authorities.
Otherwise, fill out Form FinCEN 105 and present it at customs.
You deposit the check at your bank. But before you endorse it or make a special trip to the bank, you should check to see if they are prepared to accept a large foreign check. Most US banks are ill-prepared to process foreign checks and it may take quite a while before you can use the funds and there may be a substantial fee and a bad exchange rate.
If you are a US national, then you must report the sale on your US income tax return at the end of the year.
Frankly, if I were you, I would have the money wired from a Canadian bank to my US bank account. It’s just not worth messing with a check. There are too many potential hassles. Note that not all US banks accept foreign wires into personal accounts. Inquire at your bank before proceeding.
I was going to suggest the work-around, too:
Step 1 - Open a TD Account with a branch in the USA
Step 2 - Open a USD TD Account with a TD Canada Trust branch in Canada
Step 3 - Transfer money free and easily between the two
I only suggest the TD route b/c I’ve done it, it’s easy, and it’s free. Of course, I haven’t transferred as much as you are going to, so check on large amounts first.
And dude, you’re leaving us? 
Last time I inquired at TD they said there was no connection between TD in the US and Canada. That was at least two years ago, though. I do have accounts in Royal Bank, both US and Canada that will accept transfers. I was interested in TD because they have branches everywhere.
If I leave it is to move near one of my three kids. I am 78 and it is coming to feel dangerous to be alone in the world. The problem is which of the three to move near.
The reason I chose $500,000 is that I understand there is that much of an exemption on capital gains for the sale of your residence. Also with the Canadian dollar at 80 cents that is probably what it is worth. Of course, not all of that is profit.
You are right - two years ago the US and Canada TD didn’t have a convenient way to transfer money (I had reason to do it several times between 4 and 2 years ago and it wasn’t easy at all). Then sometime since then, they have made it much easier. Don’t mean to sound like a shill for TD in any way and Royal may be just as straightforward.
I am not a lawyer or an accountant, and my experience is in ON, but aren’t capital gains on your principal residence exempt from tax no matter how high they are? See here. May be different in QC, though.
Good luck on the move. I’d chose the kid who makes the best cheesecake.
I wonder if many old rules based on valuable pieces of paper no longer have relevance in the world of computer-bits.
Border controls sometimes insisted that a tourist display an outgoing airplane ticket. Do they bother now, when “plane tickets” can be edited and printed on any computer? U.S. border control required that travelers’ checks in excess of $10,000 be declared. Nowadays people use plastic cards instead of travelers’ checks.
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[anecdote] Thirty-plus years ago, I took a smallish Bank of America U.S. Dollar cashier’s check to France with me so I’d have cash; the BofA in Paris made me wait half an hour while they checked the signature in their Book of Authorized BankAmerica Signatures; they came back saying “Sir, that’s a valid BofA cashier’s check … and we won’t cash it.” (The check had a boilerplate notation “Payable in U.S.A.”) They’d let me open an account and deposit it, but BofA France is non-retail and fees are huge. (I ended up just redepositing the check on my next trip to U.S.)
Do you mean proof of your intent to return to your country of origin? If so, yes, the US border folks have recently asked me for proof of my return to Canada when I have shown up with a one-way ticket. You are right, there are a variety of ways one could game the system. But the goal may be to try to get you flustered if you’re up to no good.
The rules about exporting generally apply to currency, and the modern ones are in place to prevent money laundering (and to a certain extent, tax evasion). Recall in Wolf of Wall Street they were taping wads of bills to one woman’s body to export cash to Switzerland. But generally, the government is putting the screws to the cash economy. How do you buy a Porsche and a multi-million dollar mansion with proceeds from your latest cocaine import deal? At some point more than $10,000 in cash has to go through a bank, and they can track it.
So any cheque, payable to you, came from a bank and is going into a bank, and the first bank will have a trail of where it ended up and how your money first got to it - which is all DEA and IRS need to know. That’s a lot different than tens of thousands in bills with no way to determine where it actually came from, where it’s going to, and who really owns it.
(In the good old days, countries worried about balance of payments would ban the export of money simply to avoid having people spend the money abroad. Buying too much abroad created a flood of the currency and lowered the exchange rate. Britain after WWII was known for this.)
I’ve never had to do anything like this, but my immediate reaction is that it’s dangerous to carry such a large amount in a personal cheque; even if the chance of it getting lost somehow are low, the consequences and hassle if you lose it could be high. Plus there may be hassle when you have to declare it crossing the border.
I would look into ways to make an electronic transfer, as others have suggested. Starting with your local bank would be a good idea.
In regard to US tax law: There is a $500,000 exemption on the sale of your principal residence if you file a joint return with your spouse and one of you owned the house for the 2 of the last 5 years and both of you made it your principle residence for 2 of the last 5 years. Single taxpayers can have a $250,000 exemption.
Note that you must report and pay taxes (if applicable) on the full amount of the sale in the year of sale, regardless of whether you bring the money back to the US or not, assuming you are a US national.
There may be additional tax rules in Canada.
And I hope you are aware of the requirements to report foreign bank accounts.
Just so nobody is confused, they do enforce the rules about carry cash and cash equivalents as vigilantly as they ever did.
In fact, one of the gotchas that CBP agents look for is the person will dutifully disclosed the wad of $50,000 that he was carrying across the border, but forgot to add in the $50 that was in his pocket or wallet. So if you go over the $10,000 limit, disclose every last penny you have on you or in your bags, etc.
Hi, Hari,
I went on the RBC site and this is what they say:
That sounds more secure and simple than carrying a large cheque, and I would think that you would not need to report it at the border, because the e-transaction would be the paper trail. I think the reporting requirement only applies if you are physically bringing cash or a negotiable instrument across the border with you - but you’ll want to check that out with US border officials to be sure.
As well, you’ll have access to the money in the US RBC account right away, without having to wait for the cheque to clear, which I would think could take a while, being a cross-border transaction for a large sum.
However, I’ve never done anything like this myself; best bet would be to talk with your bank directly.
Interesting, but both the Canadian and American account are denominated in US$ so exchange rate fluctuations don’t arise. I am aware that the capital gains on the house are subject to US income tax, but I think we are within the exemption. Barely.
One reason I would favor the wire transfer is less likely to be seized via “civil forfeiture”. I only wish I were joking.
I wouldn’t worry so much about civil forfeiture so much as bureaucratic suspicion at the border which causes delay in getting the cheque deposited.
Half a million in a cashier’s cheque is a big chunk of money. Better to have the real estate agent write a cheque to Hari, who deposits it in his Canadian account, then transfers it to his US RBC account. Nice, clear paper/ electronic trail. Probably a good idea to photocopy the cheque from the real estate agent before depositing it, just to cover it all off.
Quite a few Canadian banks offer US-denominated accounts. TD and RNC for sure. However, the RBC account is a totally separate account (I looked into this a month or two ago). To use a debit card and/or access the account from the ATMs in the USA requires a different ATM card from the Canadian dollar accounts - it can’t just be another choice on your local debit card. It’s almost like they were two separate banks. OTOH, yes you can transfer money back and forth between US and Canadian accounts at a branch. And, a number of RBC ATMs offer the option of withdrawing US cash (20's) from Canadian accounts - they do the conversion at the time of withdrawal. And, I can withdrawl US from any ATM in the USA using Cirrus or Plus and it will make the conversion.
As I said, the major concern of the IRS, DEA, and by extension the Border Patrol is cash. It’s easier to catch crooks (or give them the Al Capone treatment, nail them for tax evasion) when money can be traced. So they want to make it as difficult as possible to do business outside the banking system. How you gonna pay those guys in Columbia for the product if you can’t use the banks? Moving a couple of million in cash takes some work.
More likely, the question if you crossed the border with a cheque for $500,000 is “Why?” (And of course, “where did this come from?”) Perhaps someone coming to the USA with a big wad of cash has no intention of leaving? Perhaps a legitimate-seeming guy is just a throw-away cover story for some drug lord to get his money. And so on… Anything extremely out of the ordinary is going to raise questions.
Sure, so just deposit the cheque from the realtor into your Canadian US account, and it will be converted to US automatically.