Disposition of an RRIF upon Death

[NKy586]

I am a Canadian citizen living in the US with a US citizen wife. I own an RRIF in Canada that was transferred from an RRSP a few years ago. I entered the US in 1993 and the RRSP was open at that time. Based on the valuable advice on this website, I've been taking 10% out of the RRIF every year, paying the 15% CDN 15% and calculating the US tax based on the gain from 1993 to the current year. I have kept up to date on all the required tax forms over the years.

My question is what would be the tax consequences in both countries of the RRIF in the event of my passing? My wife would likely collapse the RRIF and take the balance in one shot. I'm not so concerned about Canada - they'll take whatever they're going to take before she sees it. But how would the distribution be taxed in the US?

If it makes any difference, my wife and I were married in 2002 and she is my sole beneficiary.

Thanks in advance.

[nelsona]

The taxable portion would remain the same as if it were still in your hands. She would do well to simply keep it as a RRIF to get the beneficial Cdn taxrate. If she collapses it, it will be taxed at 25% in Canada.

[nelsona]

It would be included in your estae for US tax purposes.