RRSP lump sum withdrawal

[uscanadataxes]

And just to be clear, to the question "Did *person* make an election in 2015 or before under US-Canada income tax treaty to defer the income accrued in this account with *my RRSP company name*". - I should say "YES", even if I never made such an election?

[nelsona]

the question is not an official IRS question, so I don't know its purpose.

How about you answer 'no' and see what happens, then answer 'yes' and see what happens.

But as I have said now three times, you are assumed to have made the election by IRS, since 2014, so I don't know what intuit is asking.

[uscanadataxes]

Thank you, exactly my logic - why do they even ask this question.

And when you mention FATCA form - do you mean form 8938?

[nelsona]

Yes.
please refer to my signature.

[uscanadataxes]

This quote is from for 8938 instruction booklet:
"Valuing interests in foreign estates,
foreign pension plans, and foreign
deferred compensation plans. If you
have an interest in a foreign estate,
foreign pension plan, or foreign deferred
compensation plan, the maximum value
of your interest is the fair market value
of your beneficial interest in the assets
of the estate, pension plan, or deferred
compensation plan as of the last day of
the tax year. If you do not know or have
reason to know based on readily
accessible information the fair market
value as of the last day of the tax year,
the maximum value is the fair market
value, determined as of the last day of
the tax year, of the cash and other
property distributed during the tax year
to you as a beneficiary or participant. If
you received no distributions during the
tax year and do not know or have
reason to know based on readily
accessible information the fair market
value of your interest as of the last day
of the tax year, use a value of zero as
the maximum value of the asset."

interest vs assets concept. Could you please explain this to me? Does it mean that if I had no distribution from RRSP and the plan didn't grow in a given year, I don't need to include this in the form 8938?

And, if I had a distribution, then I only need to include the distribution amount (in my case 10K Canadian) and, because it is less than threshold I don't really need to file form 8938?

[uscanadataxes]

Ok, I found an answer to my question in a different thread that discussed the same topic. I have an answer that "interest in" is, in my case, the value of the asset.

[nelsona]

Not quite correct.

You would only use the value of the distribution if you could not easily determine the value of the investment. This is sometimes the case for a defined benefit pension, for example.

For an RRSP you know very well its value, both throughout the year and at year-end, so these would be the figures you use to see if you meet the US resident, or US non-resident thresholds. The value of your RRSP is NOT the value of the distribution that year.

[uscanadataxes]

Thank you, nelsona, I think I got it right - this is what I meant by saying that I should use the value of the whole asset, not only distribution.

Reading more about not submitting form 8938 on time, scary. It seems that I need to use a streamline process, and pay 5% of the value of the assets as penalty for each unreported year. Would love to hear stories of people who went through this process.

[nelsona]

Probably not. if you can justify why you didn't file, you will be fine, as long as you reported all required income along the way.

[uscanadataxes]

It seems that I had an income of US15 unreported from Canadian Savings account in 2014, at the same time I had a loss of about US200 on Canadian TFSA in 2014 - It does not seem I can combine these to get a loss. So I guess I had US15 unreported... I closed the accounts in the beginning of 2015...

[uscanadataxes]

The TFSA is a mutual fund, so I cannot report loss on it until the time I withdrew in 2015.