RRSP rollover to non-US spouse

walter42 · Post by **walter42** » Mon Mar 05, 2012 6:59 pm

A US citizen resident in Canada has consistently used 8891 to defer US tax on his RRSP's earnings. He dies. Canadian tax law allows his entire RRSP to be transferred to his wife on a tax-sheltered basis. The wife is a Canadian citizen with no US status. Will the US tax the plan's accrued earnings as part of the man's final year's income and hold the estate liable? If so, what if the estate does not have enough cash to pay the US tax due?

davidstreicher · Post by **davidstreicher** » Mon Mar 05, 2012 8:41 pm

I have the same exact question, and have carefully researched it without resolution. It seems like the income deferred by reason of the Form 8891 election should be US source income, but I don't see how the IRS can collect the tax. Please let me know if you are able to secure any guidance on this.