What kind of foreign income is RRSP distribution

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

Moderator: Mark T Serbinski CA CPA

Post Reply
balle
Posts: 7
Joined: Thu Mar 03, 2005 9:15 pm

What kind of foreign income is RRSP distribution

Post by balle »

On the 1116, what kind of a foreign income is the RRSP income. I am getting confused between whether it is considered as "HIGH WITHHOLDING TAX INCOME" or "LUMP SUM DISTRIBUTION"
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

RRSP income (if you are reporting it on line 16) is 'general limitation' income.

If you are reporting it as interest and capital gains (ie. you are not using the deferral), the interest and its tax are 'high-tax' and the tax on the cap gains is 'passive'.

<i>nelsona non grata</i>
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

By the way, if you are paying $4000 in Cdn tax on your RRSP and only reporting $3000 on line 16b (from your other post), you might be better off simply taking the Cdn tax as a deduction rather than a credit, since you likely won't get to use much of the Cdn tax, once you calculte all the limits.

This will depend on whther or not you will have other general limitation income from canada in the future.

<i>nelsona non grata</i>
Post Reply