Is it the interest in a foreign RRSP/pension or the total value that contributes the 8938 threshold reporting value?

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Potassium
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Joined: Sun Apr 14, 2013 1:26 pm

Is it the interest in a foreign RRSP/pension or the total value that contributes the 8938 threshold reporting value?

Post by Potassium » Wed Oct 10, 2018 4:03 pm

I have a Canadian RRSP and some UK pension accounts. When determining if I meet the 100,000 / 150,000 reporting threshold value, do I use the total value within the RRSP/pension or just the interest/growth for the year?

This is from the IRS website.
When they use the word "interest" does it actually mean interest generated in the account for the year i.e. just as one uses the term interest on a bank to mean exactly that.

Or does the work interest mean something else in this context. I ask this question because they use the phrase "interest in" and not "interest on".

Q7. How do I value my interest in a foreign pension or deferred compensation plan for purposes of reporting this on Form 8938?

In general, the value of your interest in the foreign pension plan or deferred compensation plan is the fair market value of your beneficial interest in the plan on the last day of the year. However, if you do not know or have reason to know based on readily accessible information the fair market value of your beneficial interest in the pension or deferred compensation plan on the last day of the year, the maximum value is the value of the cash and/or other property distributed to you during the year. This same value is used in determining whether you have met your reporting threshold.

If you do not know or have reason to know based on readily accessible information the fair market value of your beneficial interest in the pension plan or deferred compensation plan on the last day of the year and you did not receive any distributions from the plan, the value of your interest in the plan is zero. In this circumstance, you should also use a value of zero for the plan in determining whether you have met your reporting threshold. If you have met the reporting threshold and are required to file Form 8938, you should report the plan and indicate that its maximum is zero.

Potassium
Posts: 39
Joined: Sun Apr 14, 2013 1:26 pm

Re: Is it the interest in a foreign RRSP/pension or the total value that contributes the 8938 threshold reporting value?

Post by Potassium » Wed Oct 10, 2018 4:11 pm

(Oh I see the reporting threshold values are now $200,000 / $300,000 if single or $400,000/$600,000 if married.)

Potassium
Posts: 39
Joined: Sun Apr 14, 2013 1:26 pm

Re: Is it the interest in a foreign RRSP/pension or the total value that contributes the 8938 threshold reporting value?

Post by Potassium » Wed Oct 10, 2018 4:38 pm

"....the maximum value is the value of the cash and/or other property distributed to you during the year. This same value is used in determining whether you have met your reporting threshold."

What does "distributed to you" mean?

nelsona
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Re: Is it the interest in a foreign RRSP/pension or the total value that contributes the 8938 threshold reporting value?

Post by nelsona » Wed Oct 10, 2018 4:45 pm

"Interest in" means that you have a stake in asset. It is your pension.

The instructions define how to evaluate a pension, if you have no way of knowing the value, it is what was distributed to to you during the year, paid to you.
Nelsona Non grata. Non pro. Search previous posts.

Potassium
Posts: 39
Joined: Sun Apr 14, 2013 1:26 pm

Re: Is it the interest in a foreign RRSP/pension or the total value that contributes the 8938 threshold reporting value?

Post by Potassium » Wed Oct 10, 2018 6:37 pm

Thank you.

Sorry but what is the definition of "value" and therefore knowing the value. If I know there is a pot of $100,000 in the RRSP (because they send a statement at the end of the year) then do I know the value of the pension or not?

If I have not yet retired and thus not receiving any payments from the pension, then the distribution is 0, and hence do I use a value of 0 towards the 8939 threshold as I am receiving no payments, or do I use a value of $100,000 as I "know" that is the current market value of the fund pot?

nelsona
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Re: Is it the interest in a foreign RRSP/pension or the total value that contributes the 8938 threshold reporting value?

Post by nelsona » Thu Oct 11, 2018 8:29 am

Since you know the value of your fund, then you put that value, just like you know the value of your RRSP, bank account, etc. The instructions say this.

Many times, pension fund 'value' is not known to the pensioner, since they are getting a defined benefit. In those cases you put what you got during the year, or 0 if your received nothing.
Nelsona Non grata. Non pro. Search previous posts.

Potassium
Posts: 39
Joined: Sun Apr 14, 2013 1:26 pm

Re: Is it the interest in a foreign RRSP/pension or the total value that contributes the 8938 threshold reporting value?

Post by Potassium » Thu Oct 11, 2018 5:59 pm

Thank you very much for the clarifications.

Should the type of the account for RRSPs / Pensions get reported on 8938 as a Custodial account? (As opposed to a Deposit account)

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