I am hoping someone can clarify this:
When did 8891s come into use? 2004?
How do they work? If one is filed at some point, does it date back to the date of creation of the RRSP, or what? (If they do not backdate to accruals/contributions made in a pre-election year, what happens then?)
And, is an RRSP always in a trust such that an RRSP owner will always have to check 'yes' on schedule B line 8? Or, does the exclusion of RRSP holders from those who have to file 3520s mean that the correct answer to sched. B line 8 is 'no'?
RRSPs and forms 8891, 3520, and 1040 sched. B line 8
Moderator: Mark T Serbinski CA CPA
8891 came to force in 2004, but there were previous Rev Procs which covered this.
The various rules still allow only investment to be determined from (a) contributions for USCs , or (B) value at time of becoming US resident for non-USCs.
Yes, having an RRSP requires you tick box on sched B 'YES", 8891 absolves one of 3520, but does not cahnge the fact that they are trusts.
Repeat: RRSPs are not excluded from 3520. 8891 replaces 3520 for RRSPs. Subtle difference.
The various rules still allow only investment to be determined from (a) contributions for USCs , or (B) value at time of becoming US resident for non-USCs.
Yes, having an RRSP requires you tick box on sched B 'YES", 8891 absolves one of 3520, but does not cahnge the fact that they are trusts.
Repeat: RRSPs are not excluded from 3520. 8891 replaces 3520 for RRSPs. Subtle difference.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
That is really helpful. So it is just line 8 on sched. B 'yes' plus the 8891s.
Now I know I am slow to pick up on these things, but I am not sure what this sentence relates to: "The various rules still allow only investment to be determined from (a) contributions for USCs, or (B) value at time of becoming US resident for non-USCs."
Does that mean that RRSP contributions filed before a USC residing in Canada's first form 8891 was filed can never be exempted under the treaty? (Because this is a treaty thing that lies behind form 8891, right?)
Now I know I am slow to pick up on these things, but I am not sure what this sentence relates to: "The various rules still allow only investment to be determined from (a) contributions for USCs, or (B) value at time of becoming US resident for non-USCs."
Does that mean that RRSP contributions filed before a USC residing in Canada's first form 8891 was filed can never be exempted under the treaty? (Because this is a treaty thing that lies behind form 8891, right?)
Ignore my comment. for clarity
What I was trying to say, is that regardless of when you began to use whatever mechanism to defer taxation, the determination of what is taxable and non-taxable still is:
a) for life-long US citizens, only their contributions are not taxable
b) for those who became US taxapayers at some point after beginning RRSP, the book value at the time they became taxpayer is not taxable.
in other words, failing to report the income when you were not using the treaty does not allow you to then bump up your non-taxable portion under the guise that it is too late to report and be taxed on it. only having reported the income gets that benefit.
What I was trying to say, is that regardless of when you began to use whatever mechanism to defer taxation, the determination of what is taxable and non-taxable still is:
a) for life-long US citizens, only their contributions are not taxable
b) for those who became US taxapayers at some point after beginning RRSP, the book value at the time they became taxpayer is not taxable.
in other words, failing to report the income when you were not using the treaty does not allow you to then bump up your non-taxable portion under the guise that it is too late to report and be taxed on it. only having reported the income gets that benefit.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Nelsona, thank you for expanding on this.
I just took a look at a 2002 3520, and it also absolves USCs resident in Canada from form 3520 of RRSPs when form 8833s are filed instead.
But, putting it all together, is it then correct to say that USCs living in Canada whose US tax liability would always have been fully excludable and/or creditable while living in Canada still have to backfile all forms (8891s through 2004 and 8833s for all the years before that) if they want all their accumulations in RRSPs to be exempt under the terms of the treaty?
I just took a look at a 2002 3520, and it also absolves USCs resident in Canada from form 3520 of RRSPs when form 8833s are filed instead.
But, putting it all together, is it then correct to say that USCs living in Canada whose US tax liability would always have been fully excludable and/or creditable while living in Canada still have to backfile all forms (8891s through 2004 and 8833s for all the years before that) if they want all their accumulations in RRSPs to be exempt under the terms of the treaty?
You are missing the point.
As a US citizen, you accumulation of RRSP (above contribution) will NEVER be exempt of tax.
You are merely electing to DEFER US tax on the growth (above contribution) not exempt it.
6 years, if you are filing 6 years. 3 years if you are filing 3 years. This changes NOTHING in terms of how much you contributed to your RRSP, and this your non-taxable portion remains the same.
As a US citizen, you accumulation of RRSP (above contribution) will NEVER be exempt of tax.
You are merely electing to DEFER US tax on the growth (above contribution) not exempt it.
6 years, if you are filing 6 years. 3 years if you are filing 3 years. This changes NOTHING in terms of how much you contributed to your RRSP, and this your non-taxable portion remains the same.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing