New CRA rules for Roth IRAs

[cfn2007]

Please see the technical news bulletin from the CRA regarding Roth IRAs at [url]http://www.cra-arc.gc.ca/E/pub/tp/itnew ... s-43-e.pdf[/url]

Looks like Canadians with Roths need to make a 1-time election by April 15, 2011.

This seems to be good news as it offers some clarity.

[nelsona]

Thank you CFN,

The bulletin does indeed specify the need to REPORT the existence of a Roth ONE TIME.

It als clarifies that once a contribution is made while a resident in canada, the Roth is, in essence, broken for Candian purposes, both with respect to taxation, and with resopect to foreign reporting.

http://www.cra-arc.gc.ca/E/pub/tp/itnew ... s-43-e.pdf

[nelsona]

The requirement to report is next tax season, or, if not currentlt resident in canada, the first tax return you fiel in Canada as a resident.

[nelsona]

by the way, the reporting date next year is April 30th, 2011, which is the Cdn tax deadline, not April 15th.

[eortlund]

Thanks--I looked over that link.I'm a bit confused--can I send in the info about our Roth IRAs with our normal tax forms, or do I need to send something separate to a different address?

[nelsona]

It seems that you send it to a separate location, next tax season.

I don't know what you "overlooked" the IT was released last week.

[aniagara]

Hi! Thank you all so much for the outstanding advice on here. Dumb question - what do the new rules mean in plain english? Basically, if you have a Roth, and report it, you won't incur any additional taxes on it in Canada? It will be the same as if you still live in the US?

Thanks!

[nelsona]

Yes. It also means that the instant you make a new contribution to a Roth while living in Canada, the tax shelter ends for CRA purposes -- THAT is the important point.

[aniagara]

great - many thanks. I didn't think I could contribute anymore now that I'm in Canada (or due to income eligibility change or something - apologies, can't remember) - so contributions not an issue, just sitting on it.

Many thanks again!

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