Retiring allowance recived in Canada by a US citizen

michsim · Post by **michsim** » Fri Apr 08, 2011 12:52 am

Is a retiring allowance recived in Canada taxale on a 1040.
Is the portion of a retiring allowance tranferred to an RRSP in Canada taxable on a 1040.?

Thank you for your comments.
M

nelsona · Post by **nelsona** » Fri Apr 08, 2011 6:28 am

The retiring allowance is subject to flat tax 25% in canada, unless you directly transfer it to another pension.

If you do this it is not taxable in US (but will eventually be taxable in both countries when you withdraw it from RRSP), if you do anything else, it is taxable in US.

michsim · Post by **michsim** » Fri Apr 08, 2011 3:13 pm

[quote="nelsona"]The retiring allowance is subject to flat tax 25% in canada, unless you directly transfer it to another pension.

If you do this it is not taxable in US (but will eventually be taxable in both countries when you withdraw it from RRSP), if you do anything else, it is taxable in US.[/quote]

Thnak you Nelsona.

michsim · Post by **michsim** » Fri Apr 08, 2011 3:15 pm

Thank you Nelsona.
Treaty position required on allowance ranferred to RRSP?

michsim · Post by **michsim** » Fri Apr 08, 2011 3:16 pm

spelling mistake of couse should "transferred to RRSP"

nelsona · Post by **nelsona** » Fri Apr 08, 2011 11:55 pm

Yes. Article XVIII(1)

michsim · Post by **michsim** » Sun Apr 10, 2011 2:48 am

Thnak you Nelsons