Moved to California from Canada in October 2016. Filling a 1040NR for this year, and 1040 next year.
I have an RRSP with Questrade that are earning dividends, which I am not withdrawing, but reinvesting. I received a 1040NR from them. I also sold certain investments in December, but didn't withdraw the money.
1. Do I need to report this on my 1040NR anywhere this year?
2. Do I need to report it on my California 540 this year?
3. Do I need to declare any gains from the stocks I sold in December 2016?
Thanks in advance.
Quick question on declaring RRSPs on 1040NR
Moderator: Mark T Serbinski CA CPA
There are 2 important distinctions that you need to keep in mind for 2016 and going forward.
1. While you are able to file a 1040NR for 2016, you ARE a US resident, and Cdn non-resident from October, you simply were not resident long enough to have to file 1040.
2. California does NOT adhere to any aspects of the treaty, so anything thatallows you to avoid/reduce taxation or reporting to IRS may not apply to California.
So,
1. No. IRS does not expect any internal RRSP income to be reported until such time as you make withdrawals from the account. I have address how one determines the taxable portion of such withdrawals elsewhere on here.
2. California requires internal income of RRSPs to be reported and taxed yearly. Since you became a resident in October, any distributions or cap gains triggered by swaps need to be reported to Cali as income.
3. Assuming you are talking about accounts OUTSIDE your RRSP, since you were a US resident at the time, you do need to report the trades occurring after October on your 1040NR and to Cali.
Since your stocks would have already been taxed in Canada through deemed disposition, for IRS purposes you can use this as your basis for taxation for the December trades (and all future trades involving stocks you held at departure from Canada). IRS Rev Proc 2010-19 addresses this.
For cali you will need to check with them I assume the rev proc does not apply, and you may be subject to tax based on the original basis, or they may have a similar arrangement in which you would only be taxed on th egains made while in Cali (I doubt that though).
1. While you are able to file a 1040NR for 2016, you ARE a US resident, and Cdn non-resident from October, you simply were not resident long enough to have to file 1040.
2. California does NOT adhere to any aspects of the treaty, so anything thatallows you to avoid/reduce taxation or reporting to IRS may not apply to California.
So,
1. No. IRS does not expect any internal RRSP income to be reported until such time as you make withdrawals from the account. I have address how one determines the taxable portion of such withdrawals elsewhere on here.
2. California requires internal income of RRSPs to be reported and taxed yearly. Since you became a resident in October, any distributions or cap gains triggered by swaps need to be reported to Cali as income.
3. Assuming you are talking about accounts OUTSIDE your RRSP, since you were a US resident at the time, you do need to report the trades occurring after October on your 1040NR and to Cali.
Since your stocks would have already been taxed in Canada through deemed disposition, for IRS purposes you can use this as your basis for taxation for the December trades (and all future trades involving stocks you held at departure from Canada). IRS Rev Proc 2010-19 addresses this.
For cali you will need to check with them I assume the rev proc does not apply, and you may be subject to tax based on the original basis, or they may have a similar arrangement in which you would only be taxed on th egains made while in Cali (I doubt that though).
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
Technically, It is only foreign income if you are a resident of Canada, which you were not after you left. However, IF you were not in US 183 days in 2016, you do not have to report these gains, according to 1040NR rules.
You will have to check with Cali about reporting in that state.
You will have to check with Cali about reporting in that state.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing