IRS on interest earned on RRSPs

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vcanusa
Posts: 2
Joined: Mon May 03, 2021 11:22 am

IRS on interest earned on RRSPs

Post by vcanusa »

Hello! I live in the U.S. as a permanent resident and I have RRSPs in Canada where I have not contributed or withdraw any money this year. The total amount on the RRSPs is over the IRS threshold so I am reporting them on form 8938. When I report the interest earned on this accounts as income on my 1040, it affects my IRS refund. It is my understanding that U.S.-Canada Income Tax Treaty provides an option to elect to defer current U.S. taxation on the accrued income. I am not sure how to do this. Do I need to report the interest earned on RRSPs or not? If so, what I should do to get the US taxation deferral?
Thanks in advance!
Alex
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: IRS on interest earned on RRSPs

Post by nelsona »

Income (including not interest, but also other internal distributions and gains generated by sales) from RRSP is not reportable to IRS, unless and until a withdrawal is made.
No form is needed for this specific purpose. Of course, it is reportable as FATCA, as you mentioned, as well as FBAR.
I am taking my usual break from this site until May. Always too many tax-form specific questions at this time of year...
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
nelsona
Posts: 17014
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: IRS on interest earned on RRSPs

Post by nelsona »

...including not ONLY interest...
I am taking my usual break from this site until May. Always too many tax-form specific questions at this time of year...
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
vcanusa
Posts: 2
Joined: Mon May 03, 2021 11:22 am

Re: IRS on interest earned on RRSPs

Post by vcanusa »

Thank you so much! I really appreciate the help!
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