The instinct to “go to America” makes sense but can be expensive
When London accepted a new job opportunity in Seattle, he thought one of the first things he would need to do was convert his Canadian investment portfolio into US dollars. Like many Canadians moving south, the logic seemed straightforward: If he’s going to live, work, and spend money in the United States, shouldn’t his investment be in American dollars?
At the time of his departure, London had approximately $500,000 invested in an unregistered account at a Canadian financial institution. The problem? Currency conversions are not investment decisions—they are foreign exchange decisions.
As of June 2026, the Canadian dollar remains weak against the US dollar. With an exchange rate of about 0.7166, a London portfolio of $500,000 Canadian would convert to about $358,300 USD.
Now, imagine that the Canadian dollar strengthens to 0.85 a few months later. That same $500,000 would cost about $425,000 USD.
Although no one can predict currency movements, the point is simple: converting a large portfolio immediately after crossing a border can permanently lock in a negative exchange rate. Financial markets move in cycles. Making a big foreign exchange decision just because you’ve moved countries isn’t always good financial planning.
In most cases, Canadians can continue to hold Canadian dollar investments after immigrating to the United States. If you expect to maintain Canadian ties, own Canadian property, support family members in Canada, or possibly return one day, maintaining some exposure to the Canadian dollar may make sense.
Your tax residence changes the rules
What it does The need to change how your accounts are structured—not the investments within them.
When London moves to Seattle, his non-registered account will remain unaffected at his Canadian facility. His change in residency creates regulatory and tax implications. Canadian taxes based on residency; United States taxes based on citizenship and residency. Once London becomes a US tax resident, it becomes subject to IRS reporting requirements for its worldwide income and assets, including investments held outside the United States.
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For many Canadians, this means transferring unregistered assets to a US-licensed advisor or agency that can serve US citizens while maintaining compliance with Canadian and American laws.
This is an important distinction. The account may need to be moved, but the investment itself does not need to be converted into US dollars.
Compare the best TFSA rates in Canada
Registered accounts require different considerations. RRSPs generally continue to receive tax-deferred treatment under the Canada-US Tax Treaty; however, not all US states follow this convention. While most states respect the tax-deferred status of an RRSP, a few may tax the account’s income and growth each year. That’s why understanding both federal and state tax laws is an important part of any cross-border move.
The PFIC trap: An expensive surprise for many new US residents
One of the biggest surprises facing Canadians moving south is the US tax treatment of Canadian mutual funds and ETFs. The IRS generally classifies many Canadian mutual funds and ETFs as foreign investment companies, or PFICs.
PFIC rules are notoriously complex. They often require additional annual reporting and can result in poor tax administration for US taxpayers. Many Canadians discover this issue years after moving—usually when a US accountant reviews their holdings for the first time.
In London, this becomes an important planning consideration. If he continues to hold Canadian dollar investments after becoming a US citizen, he cannot simply maintain the same portfolio he had while living in Canada. Investments that have performed well as a Canadian resident may be problematic from a US tax perspective.
You can still manage Canadian investments
Fortunately, avoiding PFICs doesn’t mean giving up Canadian investments altogether.
Cross-border portfolios can often be constructed using individual Canadian stocks, individual bonds, and other investments that do not fall under the PFIC rules. This allows investors like London to maintain exposure to the Canadian market while avoiding unnecessary reporting complexity and potentially negative tax consequences.
