LIRA unlocking and RRSP tax calculation

[chelavnzuo]

Q1. for LIRA unlocking, I understand that we need to wait two years as non resident and fill out NR73, but once LIRA is unlocked, does it automatically become a part of RRSP or this year's taxable income?

Q2. for RRSP, say 40k is the true cost basis when I funded it in Canada, on the day I moved to the US, the account value was 50k, and now it's more than 50k. Is my understanding correct that if today I withdraw 50k, 25% will be taxed by CRA, and nothing more will be taxed by IRS?

Q3. still for RRSP, if my understanding is correct in Q2, how can I let IRS know that this 50k income from Canada should not be taxed further in the US (after the 25% by CRA) because this amount is the account value on the day I moved to the US?

Thanks!

[nelsona]

1. LIRA unlocking requires that you withdraw the LIRA, so it becomes part of that years income. LIRAs/ since they come from company plans, are 100% taxable in US. There is no non-taxable portion, unlike private persoanl RRSPs/RRIFs.

So, if you have a persoanl RRSP, DO NOT mix in any LIRA money if at all possible.

[nelsona]

As to letting IRS know how much of a persona; RRSP is taxable, once you determine it, you put it on the OENSION line of your 1040, gross and net.