Hello, I would appreciate any last minute review and OK or correction on this from a generous knowledgeable soul. I after researching as much as I can online including the obvious threads here, I think I have the recommended procedures right, and am looking for hopefully a quick confirmation or correction where needed.
We are dual US-Can citizens married filing jointly. I am born Yankee, moved to Can, got married to Canuck, became dual, moved back to US in 2007 and sponsored spouse, who joined me in US January 1, 2008. From when we lived in Canada, I have a Canadian municipal employee pension and my spouse has three smallish RRSPs and in total these four assets came to about 120K CAD at the end of this year, so I am assuming they did exceed $100K USD at year-end or $150K USD at maximum value during year. No funds have been added or withdrawn from these retirement accounts since we moved to US. We have a few insignificant bank accounts we kept in Canada in case we need them, with somewhere between $0 and $30 in them each over this year, none of which make interest. From none of any of these Canadian assets have we received income.
After relying on CPAs both Canadian and US for year one of the transition, then US CPA for the next three years, I decided I would do the taxes this year, using Turbo Tax. I thought I was doing great till I got to their prompt about Form 8938, then noticed the references on it to Forms 8891 and Form TD F 90-22.1, none of which we were aware of before. Lovely. Spent days researching.
My conclusions on the easiest, appropriate way to deal with this situation this year is to:
1. Attach to our timely-filed joint 1040 for the 2011 tax year:
a. twelve (12) 8891 forms including one for each of spouse's three RRSPs for this 2011 tax year, as well as for the preceding three tax years since 2008 was the first year spouse was in this country. We will check the election to defer taxes on each and every one. The 8891s will be filed in spouse's name only, since they are his RRSPs, despite fact that I am indicated as "beneficiary" on the RRSP itself -- I understand that is not significant in US tax terms unless/until he dies and I receive funds from them. Same in referse for my Canadian pension. On the 8891, he is the "beneficiary" for his RRSPs and I am the beneficiary for my pension.
b. an 8938 form for this tax year 2001, using the additional attachment to report, in our names jointly, all of our foreign financial assets for this tax year 2011, except the RRSPs. All the insignificant Canadian bank accounts go in Part I, and my canadian municipal pension goes into Part II.
Oddly we all of these our our names together, since we are filing jointly even though not all accounts are in both our names. I'm seeing people talking about filing another 8938 for 2010 but I don't see that's this is necessary because the requirement applies to tax years starting after March 2010, which constitutes tax year 2011 only.
2. File by June 30 of this year appropriate Form TD F 90-22.1 or possibly two one for each of us, reporting the accounts in each of our names... with appropriate duplicates/back year reports as applicable to my arrival back in US in 2007 and spouse's arrival in 2008. I'll figure those details out after I get the taxes in this year, but the main poit is I'll file all of those together by June 30 with Treasury.
Is this correct?
One thing I am not clear about is whether the catch-up 8891s for 2010, 2009 and 2008 can all be filed simply as attachments to this year's 1040 for 2011, or whether the ones for each prior year have to be attached to a 1040X for the prior year. Again, there ain't no income from none of 'em so there is no change to our tax liability.
Appreciate any last minute confirmation or correction on this. I think I still have a chance to file on time if I've got this right.
Confirmation re: Proposed Handling of Canadian Accounts
Moderator: Mark T Serbinski CA CPA
Sorry, one additional question.
We also have an unused Canadian line of credit and unused credit card account both with 0 balance since we moved to US. Are those also reportable financial accounts?
They are not "assets" in reality, nor are they defined as a type of account covered in the direction for the form 8938, so I'm not planning on putting them there.
I do not see lines of credit included in the definition of a financial account in the TD F 90-22.1 either, but since they are I believe a type of "account" I would need to include them on the TD F. Do you agree?
We also have an unused Canadian line of credit and unused credit card account both with 0 balance since we moved to US. Are those also reportable financial accounts?
They are not "assets" in reality, nor are they defined as a type of account covered in the direction for the form 8938, so I'm not planning on putting them there.
I do not see lines of credit included in the definition of a financial account in the TD F 90-22.1 either, but since they are I believe a type of "account" I would need to include them on the TD F. Do you agree?
OK, from another thread I've learned that I need to file an extension for this year, then go back to file amended returns, starting with 2008 in which I'll check "no", I have not previously made the election and request the election for 2008 and all subsequent yearss, then do 2009 and 2010 saying yes I have requested the election back in 2008, then do the 2011 return doing the same on the 8891 and doing the 8893s attached also just for 2011. Then figure out what do do for my TDRs.
I can do that.
I can do that.
Hi YankNucks,
Strictly speaking, you must file Form 8891 on time including extensions. Refer to: http://hodgen.com/rrsp/get-private-lett ... late-form/. However as nelsona wrote in another thread, penalties are rare because filing that form can eliminate current tax due on RRSP income. Once you obtain your PLR (or not) you must file the delinquent Form 8891s with a Form 1040X.
You're right, credit accounts are not reportable on the FBAR.
If you're both US persons and your spouse only has a joint interest in foreign accounts, then she is not required to file but is required to co-sign your FBAR. Refer to the "Exceptions" section in the instructions.
The IRS has published a comparison table of the FBAR and Form 8938 filing requirements: http://www.irs.gov/businesses/article/0 ... 86,00.html
Strictly speaking, you must file Form 8891 on time including extensions. Refer to: http://hodgen.com/rrsp/get-private-lett ... late-form/. However as nelsona wrote in another thread, penalties are rare because filing that form can eliminate current tax due on RRSP income. Once you obtain your PLR (or not) you must file the delinquent Form 8891s with a Form 1040X.
You're right, credit accounts are not reportable on the FBAR.
If you're both US persons and your spouse only has a joint interest in foreign accounts, then she is not required to file but is required to co-sign your FBAR. Refer to the "Exceptions" section in the instructions.
The IRS has published a comparison table of the FBAR and Form 8938 filing requirements: http://www.irs.gov/businesses/article/0 ... 86,00.html
Dang. Now I'm stumped on how to fill out the rest of the 8891 when we have taken no funds from the RRSPs of any kind nor made contributions. There are no definitions for the fields after 7 on the 8891 and I can find no other instruction document, RP or IRB as you can sometimes scrounge for which provides more info. Instructions in 1040 don't provide definitions but all seem to describe receipt of funds and none seem to apply. The plan increased in value, and I can say by how much, but does that need to be recorded in one of these fields or do they all just stay 0? If so I'm not sure why I need to fill out the 8891.
If you have made no withdrawals, write 0 on lines 7a and 7b. If you have made no contributions, write 0 on line 9. Write the market value of the plan on Dec. 31 on Line 8. If you've made the election to defer tax in the current or prior year, do not fill out line 10. Done!
Form 8891 is always required with an RRSP because the IRS says so.
Form 8891 is always required with an RRSP because the IRS says so.
Tax preparation is stressful for most of us, compelling many to delay until the last minute to submit. Most years, the very last day to submit income taxes is April 15. This year though, taxpayers get an extra two days to submit. However, for many, this will still be too soon. But there are some filing recommendations for tax procrastinators. Find out here: [url=http://personalmoneynetwork.com/moneybl ... -tax-tips/]Last minute tax filing tips for procrastinators[/url]
Thanks all. What do you think about the need to include a Canadian line of credit and a credit card which we retain but are unused (have 0 balance and have had since we moved to the US), in either:
- form 8938, for reporting "foreign financial assets". A line of credit is technically an account, but it is not an asset, and it is not listed in the instructions among the types of financial accounts to be reported on this form.
- form TD F 90-22.1, for reporting of "foreign financial accounts". Again, these lines of credit are a type of account, but they are not included in the listing of types of accounts in the instructions.
I wonder about what may be intended in these forms' instructions as included in "and other accounts" not listed, but I am really thinking of not including these credit accounts in either of the forms, as it does't seem to fit the purpose. Then again, IRS requirements frequently are unclear and illogical to me so I doubt myself.
- form 8938, for reporting "foreign financial assets". A line of credit is technically an account, but it is not an asset, and it is not listed in the instructions among the types of financial accounts to be reported on this form.
- form TD F 90-22.1, for reporting of "foreign financial accounts". Again, these lines of credit are a type of account, but they are not included in the listing of types of accounts in the instructions.
I wonder about what may be intended in these forms' instructions as included in "and other accounts" not listed, but I am really thinking of not including these credit accounts in either of the forms, as it does't seem to fit the purpose. Then again, IRS requirements frequently are unclear and illogical to me so I doubt myself.
For the TD F 90-22.1 reports, you would only include a credit card or credit line on your report if somehow you ended up in a situation where they owed you money. As an example, suppose you accidently paid too much on your credit card, or you have one of those cards that are pre-paid.
Although I assume the situation is the same for 8938, I am not as familiar with that case.
Although I assume the situation is the same for 8938, I am not as familiar with that case.
rlb is correct for FBAR, if you had a positive balance. Personally, I would only included it if I "loaded it up" with cash at some point. If there was a refund or a small overpayment, I would not bother.
I don't think it meets the 8938 criteria, but that is fresh paint.
I don't think it meets the 8938 criteria, but that is fresh paint.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 