I am sure this question was raised before - sorry for repeating it.
My husband and I both worked in the USA for over 10 years and hvae now returned to Canada. We both have surrendered our Green Cards.
We would like to transfer to Canada our 401k (my husband) and my IRA. We understand there may be tax implications. So what kind of percentage would be deducted and would the transfered funds be regarded as cash in Canada. Thnak you.
Transfering 401K to Canada
Moderator: Mark T Serbinski CA CPA
You are correct. There are several thrads on this, which I invirte you to research.
Bottom line, there is no advantage in repatriating your 401(k) to canada. leave it in US (invest in foreign funds if you wish to counteract the crappy US dollar) and take it at retirement. You at the very least will lose 10% of your withdrawl (penalty if less than 60 yrs old). and you absolutely must have the equivalent Cdn income to write-off the US tax on your Cdn return (ie. if you want to repatriate $100K of IRA, you need to also have 100K of Cdn income in the same year). You also need to have cash on hand to cover the 30% tax withheld at source to put in your RRSP.
So, why bother.
Otherwise, wait until the treaty changes are ratified and transfer the funds to a Roth.
Bottom line, there is no advantage in repatriating your 401(k) to canada. leave it in US (invest in foreign funds if you wish to counteract the crappy US dollar) and take it at retirement. You at the very least will lose 10% of your withdrawl (penalty if less than 60 yrs old). and you absolutely must have the equivalent Cdn income to write-off the US tax on your Cdn return (ie. if you want to repatriate $100K of IRA, you need to also have 100K of Cdn income in the same year). You also need to have cash on hand to cover the 30% tax withheld at source to put in your RRSP.
So, why bother.
Otherwise, wait until the treaty changes are ratified and transfer the funds to a Roth.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best