I hope to get clarification on a few topics which have been discussed before but are not clear to me regarding my situation. I had thought that the Big 5 firm information given to me when I moved from Canada to the USA in 1990 was correct but now I think it might have been wrong. I am a permanent resident in the USA with no intention of returning to Canada. I am currently applying for US Citizenship. That along with the weaking US dollar has prompted me to look into the pros and cons of moving all my Canadian assets to US$.
1)(a) I have a RRSP which is worth less now than when I departed Canada. The account address is my parents address in Canada. I do not believe that my accountant in the USA has filed any 8891's on any past US return. I will need to check to be sure. If this is indeed the case what steps do I need to take in order to cash out the RRSP? From reading the other threads it seems I might need to file last 6 years of 8891's.
1)(b) Do I need to change the address on the plan to my USA address at any point?
1)(c) If I filed the 8891's before the end of 2009 should I wait until 2010 to cash out of the RRSP or can it be done in 2009 without having to face any IRS issues for the 8891's not being filed in the proper years?
2) I have had a RESP for my son and he reached 27 years of age in 2009. The RESP company informed me that I needed to close the plan and take the funds that were unused out of lose them. They sent me a form to direct them to contribute the funds to my RRSP or take them in cash with a large (I think 50%) withholding to the Canadian Government. I selected to be paid in cash which was about $2500. I do not believe any information about this RESP was included in my past IRS tax returns but I would need to verify. Is there anything that needs to be done regarding this payment and past disclosure?
3) I have a couple of Canadian bank accounts that are joint with my remaining parent in Canada. Do I need to disclosure these on my US tax return and if so how do I do this. The max in the account is about $10K.
4) I have a couple of Canadian bank accounts that have $4K and $5K repectively. What needs to be done regarding current and past disclosure on my US tax returns. I believe any interest earned on these accounts was reported.
5) I have a GIC (2 year) about $10K with a Canadian bank. What needs to be done regarding IRS reporting? Is the interest reported once it matures or yearly and on what IRS schedule?
6) I have a brokerage account in Canada that has my parents Canadian address. It was originally $20K when I moved but is now worth less than $1K due to poor investment performance. Could I just cash it out? Is any IRS or Canadian reporting necessary?
Thanks.
Confused about RRSP, RESP, Cash and Brokerage in Canada
Moderator: Mark T Serbinski CA CPA
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runner57us
- Posts: 3
- Joined: Sat Oct 17, 2009 7:59 pm
1. Even though you account may be worth less, I'm quite sure your account generated internal income in the form of distributions over the the years. These were taaxable in US unless you elected to defer taxation. This is donly only with form 8891. So, you should file 8891 for the pat 6 years, since this not only defers taxation, it also satisfies trust reposting requirements. Doing this BEFORE cashong out avoids IRS coming after you.
The address on the account is meaningless for IRS purposes. For CRA however, the account ned to be made non-resident so that proper 25% NR tax is withheld. By 'faking' the address all these years you have put the broker in a bad posotion as they were not supposed to deal with you without getting permission from your state of residence.
It doesn;t matter what yeaer you cash out, but you MUST back file 8891 first.
more later.
The address on the account is meaningless for IRS purposes. For CRA however, the account ned to be made non-resident so that proper 25% NR tax is withheld. By 'faking' the address all these years you have put the broker in a bad posotion as they were not supposed to deal with you without getting permission from your state of residence.
It doesn;t matter what yeaer you cash out, but you MUST back file 8891 first.
more later.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
2. This should have been reported all along on 3530 and FBAR form as well as your 1040.. Were you also getting the Grant money for it? You probabaly weren't eligible for it, you did not live in canada. Did your son?
3. Yes. FBAR
4. You believe it was reported? was the accoiunt reported on your FBAR form?
5. You can report the interst when it is received.
I cannot believe the advice you supposedly got.
3. Yes. FBAR
4. You believe it was reported? was the accoiunt reported on your FBAR form?
5. You can report the interst when it is received.
I cannot believe the advice you supposedly got.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
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runner57us
- Posts: 3
- Joined: Sat Oct 17, 2009 7:59 pm
Thanks for you help.
What is FBAR?
My Son lives in Canada.
I am currently unable to get to my tax return copies but will in the next couple of weeks in order to review them. I worked for a US company that offerred me a transfer to the US. The initial tax advise was done by a US company that they utilized and my tax returns were handled by a accounting company they retained. I left them in 2000 and have had several accountants handle my tax returns since then.
Once I reveiw the old returns I may have some clarifying questions.
What is FBAR?
My Son lives in Canada.
I am currently unable to get to my tax return copies but will in the next couple of weeks in order to review them. I worked for a US company that offerred me a transfer to the US. The initial tax advise was done by a US company that they utilized and my tax returns were handled by a accounting company they retained. I left them in 2000 and have had several accountants handle my tax returns since then.
Once I reveiw the old returns I may have some clarifying questions.
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runner57us
- Posts: 3
- Joined: Sat Oct 17, 2009 7:59 pm
I was able to find the document that reviewed my tax situation before I left Canada. Here is exactly what they wrote about the RESP.
"There will be no deemed disposition of the RESP upon ceasing Canadian residency. No Canadian tax implications will arise with respect tot he RESP until payments are made to the beneficiary upon maturity of the RESP. If the beneficiary is a non-resident upon maturity of the RESP they will be a 15% withholding tax on the interest component of any payments made to your children.
The US wiull not tax the interest income earned in the RESP on an annual basis since the RESP is a non-discretionary trust. Only income actually recieved by the beneficiaries will be subject to tax, which will likely be offset by foreign tax credits."
"There will be no deemed disposition of the RESP upon ceasing Canadian residency. No Canadian tax implications will arise with respect tot he RESP until payments are made to the beneficiary upon maturity of the RESP. If the beneficiary is a non-resident upon maturity of the RESP they will be a 15% withholding tax on the interest component of any payments made to your children.
The US wiull not tax the interest income earned in the RESP on an annual basis since the RESP is a non-discretionary trust. Only income actually recieved by the beneficiaries will be subject to tax, which will likely be offset by foreign tax credits."