1031 transactions relative to moving to Canada - tax implications

[Cathy McNair]

I am a dual citizen and currently a long-time U.S. resident, but moving back to Canada this year.  I would like to do a 1031 exchange of one U.S. rental property into another U.S. rental property of slightly lesser value, and I would like to time the exchange to avoid paying capital gains taxes in Canada if possible.  (My understanding is that since Canada doesn't have a  tax law similar to a 1031 exchange and there would only be U.S. taxes paid on the boot, then if I was a Canadian resident at the time of the exchange, I would pay tax on the remaining gain in Canada.)  So I was wondering if I am correct in thinking that:

1. As long as the sale of the relinquished property closes prior to becoming a Canadian resident again this year, that I won't be subject to taxation on the gain in Canada?

2.  The purchase of the replacement property can occur either before or after the move to Canada as long as the 1031 exchange criteria are met?

Or, are there any tax consequences regarding the timing of the purchase, or the funds going through an intermediary, or the release of the boot relative to changing residency that I am unaware of?  

Thanks.

[Elliott Milek]

@Cathy McNair Dave is correct as you can do the 1031 within the US but you will still be required to report the gain here in Canada. Since you don’t have the cash from the sale you can’t pay the Canadian tax and will

Not be eligible for a foreign tax credit resulting in double taxation. Feel free to reach out to me if you would like to discuss