RRSPs and FBAR

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

Moderator: Mark T Serbinski CA CPA

Post Reply
jaaron
Posts: 10
Joined: Tue Dec 04, 2012 9:08 pm
Location: Canada

RRSPs and FBAR

Post by jaaron »

I'm an American citizen, Canadian resident.

My bank accounts in Canada stay below $10k, so I have not had to file an FBAR (and would like to keep it that way).

I am interested in opening an RRSP next year and want to know if RRSPs count towards the $10k threshold.

I found the following in the FBAR instructions:
"Participants in and Beneficiaries of Tax-Qualified Retirement Plans. A participant in or beneficiary of a retirement plan described in Internal Revenue Code section 401(a), 403(a), or 403(b) is not required to report a foreign financial account held by or on behalf of the retirement plan."

However, I have read elsewhere that RRSPS do need to be reported on the FBAR (perhaps because RRSPs don't count as Tax-Qualified Retirement Plans?) Can you provide some clarity on whether RRSPs count towards the $10k threshold and whether they need to be reported on FBAR?

A second question is whether I need to be concerned, for US tax purposes, about the contents of the RRSP - will holding mutual funds trigger any PFIC issues if they are held within an RRSP? Are there any issues with holding shares of Canadian private companies in the RRSP? Or does the RRSP status shield me from those issues?

Thanks so much

Best,
Jon
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

RRSPs are not qualified to be exempted, so they make must be included in FBAR. Also, they are subject to FATCA rules.

On the other hand, RRSP have a special exemption for PFIC purposes, unlike any other investment account.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
tony
Posts: 97
Joined: Tue Oct 18, 2016 8:50 pm

Post by tony »

hi Nelsona,
On another answer, you mentioned that RSSP doesn't require reporting every year.
I need to know the value before I move to US only.
(viewtopic.php?t=11350)

But, in this question here, you said it needs reporting. Even, under FATCA & FBAR.
That means, RSSP is a nuisance reporting although we don't need to pay tax until distributed.

Am I missing anything here?
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

Correct what I said earlier RESP's are not qualified.... RRSP's are.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
ND
Posts: 291
Joined: Thu Feb 21, 2013 5:28 pm

Post by ND »

RE "My bank accounts in Canada stay below $10k, so I have not had to file an FBAR (and would like to keep it that way). "

FBAR kicks in when the aggregate of all FBAR accounts is $10,000 (can be five accounts with $2,001 in each of them).

Accounts is a broad FBAR term that includes more than just bank accounts. In fact, IRS said in a webinar that if someone loaned you money by way of letting you access their account, that account now falls under YOUR FBAR filing requirements.

You may have already understood these two points but since it wasn't clear in your posting question, I thought I'd point it out.
Post Reply