How does CRA treat Direct Conversions of IRA to Roth-IRA?

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

Moderator: Mark T Serbinski CA CPA

Post Reply
deepu134
Posts: 3
Joined: Sat Mar 06, 2010 11:36 am

How does CRA treat Direct Conversions of IRA to Roth-IRA?

Post by deepu134 »

I lived and worked in the US until 2007, after which I moved to Canada as a permanent resident. During my time in the US, I had retirement investments in IRA, Roth-IRA, and 401k (which was rolled over into my IRA after my quit my job in the US in 2007). My last US tax return for 2007 was married, filing separately.

My understand is that starting 2010, individuals with married, filing separately status are allowed to do direct conversions of IRA to Roth IRA. However, I am not clear how CRA views these directions conversions. Does CRA tax any of these conversions from an IRA as distributions?
nelsona
Posts: 18678
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

DO NOT convert any sheltered investments into Roth as Cdn resident. You will have NO sheltering in canada the moment you do this.

Leave as is. The roth you have is sheltered in canada, and the IRA grows tax-deferred. If anything, wait until you next move back to US to make any shifts.
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
Post Reply