401k to IRA rollover while Canadian resident

jeffwa · Post by **jeffwa** » Tue Sep 04, 2007 7:57 pm

Hi,

I'm leaving the US for Canada next week. I have a 401k with my ex-employer and I want to rollover the money to an IRA... However, I cannot do it before moving out of the US...

So, any tax implication in Canada for such a move? Will I have to notify the Canadian governement of that transfer? What about the IRS?

I already opened an IRA account with my US broker in anticipation of such a move...

Thanks,

jeff

nelsona · Post by **nelsona** » Tue Sep 04, 2007 9:10 pm

The rollover is a non-event for Cdn tax .

As long as the monies stay within the sheltered arrangements, there is nothing to report to cRA. Only when you begin taking it out will it be reportable to CRA, to the same extent it will be to IRS.

Fri Sep 07, 2007 10:08 pm

You can roll a 401(k) to an IRA at any time, even while living in the U.S., without tax consequence. Moving to Canada will not change anything here.

Michael Lalonde · Post by **Michael Lalonde** » Thu Apr 12, 2012 5:30 pm

I just got off of the phone with the Canada Revenue Agency. I asked exactly this question. Suppose that citizen X now resides in Canada, but once resided in the US. X wants to roll funds over from a 401k to an IRA. Are there any Canadian reporting requirements? The CRA agent found a ruling that provides an answer to this question. In particular, X has to report the amount rolled over on line 130 (other income) but then X can take a deduction for exactly that amount on line 256 (additional deductions). The deduction on line 256 is supported by the Income Tax Act 110.(1)(f)(i). I asked him to send the ruling to me: if there's any interest and if the ruling is not too long, I can transcribe the relevant part of the ruling here when I receive it (5 to 10 business days).

nelsona · Post by **nelsona** » Mon Apr 16, 2012 12:13 pm

Indeed an 401(k) to IRA transfer is a non-event for US, and same for canada. Report income and then deduct.

Nothing new.

Michael Lalonde · Post by **Michael Lalonde** » Mon Apr 16, 2012 9:39 pm

@nelsona: yes, it's *almost* a non-event for Canada. But not a total nonevent, since there are reporting requirements -- unlike moving funds from one RRSP to another, a total non-event without even any reporting requirements. I emphasize this because it's important to report properly, even if there's no material difference.

nelsona · Post by **nelsona** » Tue Apr 17, 2012 7:31 am

OK. See my million other posts on this.