US treatment of unmatured RRSP in year of death?
Moderator: Mark T Serbinski CA CPA
US treatment of unmatured RRSP in year of death?
A Canadian citizen who was a long-time US resident died before reaching retirement age. The person had an RRSP from years lived & worked in Canada. I know that for Canadian purposes, the entire FMV is a deemed distribution in the year of death. But what is the treatment on his final US Form 1040? None since there was no actual withdrawal prior to death? Reporting of all formerly deferred accrued income? Or does that go on US Form 1041, when the RRSP funds are actually disbursed? Something entirely different? Can't find an answer anywhere! Thanks very much.
Re: US treatment of unmatured RRSP in year of death?
The RRSP would form part of his estate, and would be subject to (a) first, the overall limitations on estate tax and (b) the limitations on how much any particular heir could inherit without the estate owing taxes. And any tax arising in Canada from the disposition of the RRSP and other items could be used against either the US income or estate tax that would be incurred.
Unless the estate is worth 8-figures, their is probably little US estate tax liability, but it would be wise for you to consult an estate tax specialist.
Unless the estate is worth 8-figures, their is probably little US estate tax liability, but it would be wise for you to consult an estate tax specialist.
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