Since Roth IRAs are given no tax preference when the account holder is a tax resident of Canada, does it make sense for a US citizen to convert a Roth IRA to a traditional IRA before taking up tax residence in Canada?
If I'm US citizen have significant IRA and Roth IRA assets, can I move the Roth IRA assets into a traditional (nondeductible) IRA before I move so that the earnings are not taxed until I make withdrawals?
Making the earnings taxable defeats the purpose of the Roth, but they would be taxed anyway once I take up permanent residence in Canada.
Roth IRA conversion before moving to Canada
Moderator: Mark T Serbinski CA CPA
You CANNOT convert existing Roths into a Traditional IRA.
The most you can do is re-characterize the current year's Roth contribution into a Traditional Contribution.
The best thing is to either leave them, requesting that CRA give you special permission to defer tax on Roth (much akin to the way IRS does for RRSP, but requires permission).
Or cash them out.
We have spoken about this at length in another thread. Look for 'recharacterization'
<i>nelsona non grata... and non pro</i>
The most you can do is re-characterize the current year's Roth contribution into a Traditional Contribution.
The best thing is to either leave them, requesting that CRA give you special permission to defer tax on Roth (much akin to the way IRS does for RRSP, but requires permission).
Or cash them out.
We have spoken about this at length in another thread. Look for 'recharacterization'
<i>nelsona non grata... and non pro</i>