SDRSP and RESP

Jack Pengy · Post by **Jack Pengy** » Fri Apr 22, 2011 4:59 am

I am a dual US/CAD citizen residing in Canada since I was a child. I have filed US income tax returns on time for the past 10+ years. I have 3 questions:

1. I have a self-directed RRSP but have never deducted any contributions to this account on my US return. I have filed form 8891 as I have assumed that gains etc in this account are not taxable provided the 8891 is filed on time. I`d appreciate feedback on whether my assumption is correct...

2. I am a contributor to an RESP for my son. I had never considered that I needed to include the RESG and gains on this account in my return but now I see I should be. I made contributions in 2003-2008 so I assume I should amend my returns accordingly. I would appreciate guidance on whether I should just amend the past 3 years, 5 years or back to inception.

3. Is the standard deduction still available to me even if I use the foreign earned income exemption... for example if I have $70k of earned income and $10k of interest income, can I take a $70k earned income exclusion and still get the $5k standard deduction to apply against the $10k interest income (ignoring FTCs).

Thank you for any assistance you can provide.

nelsona · Post by **nelsona** » Fri Apr 22, 2011 5:07 am

1. Correct. Only the undeducted RRSP contributions form the 'basis' for your RRSP, all other ammountrs will eventually taxed in US, when you take any withdrawals.
2. Not only income is to be reported, but also trust form 3520/3520-A need to be filed. Search for this on this board.
3. Yes. You get any deduction or credit availabale on 1040.

Jack Pengy · Post by **Jack Pengy** » Fri Apr 22, 2011 5:11 am

Thank you for replying so quickly.

re RESP, am I better to go back and amend to 2003 forward or should I just worry about the past 3-5 years...

nelsona · Post by **nelsona** » Fri Apr 22, 2011 5:20 am

6 years is always my suggestion. 3 for sure.

Jack Pengy · Post by **Jack Pengy** » Fri Apr 22, 2011 5:22 am

Thanks again

Baja_saf · Post by **Baja_saf** » Wed Apr 27, 2011 1:57 pm

You might need to file an FBAR form too. I'm not sure but the FBAR threshold is low - if your bank and brokerage assets exceeded $10,000 in any given day in 2010, you might need to file the form.

Jack Pengy · Post by **Jack Pengy** » Wed Apr 27, 2011 4:07 pm

Thanks, got it!

Jack Pengy · Post by **Jack Pengy** » Thu Apr 28, 2011 12:51 am

Just to confirm, I'd like to sell some shares in a self-directed RRSP (for which I have filed form 8891 each year) which by its nature was never an employer-funded RRSP. If I trigger a gain of $20,000 but that $20,000 remains in my self-directed RRSP account - then there is no US tax impact until I actually remove the funds from, or close, the RRSP account (providing I continue to file the deferral form each year)?

nelsona · Post by **nelsona** » Thu Apr 28, 2011 10:55 am

Of course. This has nothing to do with what type of RRSP this is. This is merely internal earnings of an RRSP.

Jack Pengy · Post by **Jack Pengy** » Fri Apr 29, 2011 3:07 pm

Thanks for your help.