Serbinski Accounting Firms

[quote="excan007"]Thank you nelsona. It all makes sense . I wish IRS provided some example for the 1 million or so Canadians living here. Thank you "Nelsona" for all the information so far I read the long and exhaustive instruction to forms 1116 for year 2010 and nowhere it says ...

Thank you nelsona. It all makes sense . I wish IRS provided some example for the 1 million or so Canadians living here. One more thing The first tax return in US was in 2003 with the election. I wil just use the average USCDN exchange for 2003 for the RRSP cost basis -I would think this should be OK.

Just trying to wrap it up. So with 50k gross distribution of which 20k is taxable in US because of the treaty/election to defer gain the gross foreign income on line 1b of form 1116 should be 20k Is this correct ? Is there an IRS example or reference for this? For the conversion rate - does one use ...

OK. When I enter the 50k ditribution from RRSP 20k taxable (Growth since entering US) I get a jump of 5600$ in TAX this is the 28 % AMT rate on the 20k. Then in foreign tax credit - "step by step" it asks for the gross income from foreign source I enter 50k for the entire distribution then...

Dear Nelsona, Indeed it seems that almost entire credit is used. I use now "general income" and you are right it makes no difference. One thing I don't quite understand is that I thought it will be neutral on my taxes. Ie Tax on gain in RRSP will be offset by the foreign tax credit. But it...

[quote="nelsona"]Yes, general income, by elimination of the others. RRSP is defined as pension. You are probaby not doing the 1116's correctly. It is not passive income.[/quote] Do you have a solid reference to the IRS position that RRSP distribution is not passive income ?? It could be in...

[quote="nelsona"]Lump sum distribution is for specifically defined transactions. Besides, it doesn't help that it would be in one category or another.[/quote] Thanks. But. Is there a precedence or IRS guidance which category to use. Actually there is passive income, general income or, lump...

Dear nelsona et al,

Do you have a good reference on why income resulting from collapsing the RRSP would be considered "general income" rather then "lump sum distribution" in the US tax return??

I have seen conflicting messages.

It does affect the foreign credit calculation