Taxes on joint savings account or GICs

[nelsona]

Thwe iBopnds are taxbale in your name by CRA's attribution rules. The Roth however, because it is a pension plan, which is not subject to attribution rules, becomes hers as soon as funded.

[Jonhello]

i see.

Then even if she does a full distribution on the Roth IRA and then with the funds I would invest in a CD or stock under my name, it would still be considered her funds by CRA? Or because it was originally funded with my money once it is distributed and the various taxes paid to the IRS (and the CRA if needed) then it would be considered my money?

If the first scenario is true, it might be better to just leave the money in the Roth IRA and pay taxes on the past and future gains to the CRA rather than pay the various penalties to the IRS and also pay for taxes on future gains.

Does this make sense?

[nelsona]

Read what I said, the instant you funded her Roth, its her money, by CRA rules.
Roths are protected if one (your wife or you) does not make contributions while she is a Cdn resident.

[Jonhello]

We made a contribution unfortunately while she was a Cdn resident.

It seems smarter to keep the money in the Roth IRA so that she doesn't need to pay the IRA penalty (taxed and 10% penalty on the gains). Are there any disadvantages to keeping the money in the Roth IRA?

[nelsona]

Well, now the income is no longer sheltered in Canada, so she needs to pay tax on it as if it was a regular account. So the Roth advantage is completely lost. I would be closing it as soon as possible.

[nelsona]

Until you guys figure out where you plan to live, stop contributing to sheltered accounts altogether, since by and large they don't line up with the various countries you are taxable in.

[Jonhello]

Thanks, Nelson, for all your help.