LIRA from pension --question re reporting on 8891 & TD f

chrisontario · Post by **chrisontario** » Thu Mar 22, 2007 2:57 pm

Hi again

I have a LIRA that was created several years ago from a transferred pension. I also have an RSP with this company. When I discussed relocating to the US with them, the advisor said that my LIRA could not collapsed, as it was over the minimum $ threshold. That was fine with me, as I had no intention of collapsing any of my Cdn. retirement accounts.

Now that I'm in the US, and need to submit 8891 and the Treasury Dept. forms annually, even tho' it's a LIRA from a pension, I am planning on recording it on both forms. My question is, can I treat it as a pension and NOT report it?

nelsona · Post by **nelsona** » Thu Mar 22, 2007 3:24 pm

Your LIRA is an RRSP for the purposes of 8891. In any event, you are better off treating it as an RRSP in IRS eyes, as RRSPs have favourable tax treatment over foreign pensions.

The ability to collapse the LIRA has nothing to do with its size, but has everything to with the jurisdiction under which it was registered. If it was registered in Ontario, you will have to leave it, if it was registered elsewhere, or if you were employed in a federally-regulated industry, you can break it by proving non-residence.