I own shares of several US based LPU's that I recently bought inside of an RRSP. First round of dividends comes in and 37% held back.
I have no other US income at all. The dividends amount to about $20K per year, so $7400 held back in taxes. That would put my US income at about a 12% tax rate if I understand correctly. So... If I were to go to the expense of filing my taxes in the US, would I get a refund for the difference? If so, it would be about $5,000. Which raises the question, does the refund then become additional income for my Canadian tax return because even though the dividends are inside the RRSP, the refund is not?
And of course, how much would it cost for you to prepare my IRS tax return every year? If the price is reasonable, I will probably retain these stocks and even buy more. If it costs more to file than I get back in rebate though, there's little point keeping them.
Thanks in advance!
DavidH
K1 revenue inside an RRSP - can I get the 37% tax reduced?
Moderator: Mark T Serbinski CA CPA
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Re: K1 revenue inside an RRSP - can I get the 37% tax reduced?
RE: That would put my US income at about a 12% tax rate if I understand correctly.
How did you conclude a 12% rate instead of 30% FDAP rate on NRA?
So... If I were to go to the expense of filing my taxes in the US, would I get a refund for the difference?
Should you not instead be looking at the diff between the 37% wh rate and 30% FDAP rate for refund of 7% wh?
How did you conclude a 12% rate instead of 30% FDAP rate on NRA?
So... If I were to go to the expense of filing my taxes in the US, would I get a refund for the difference?
Should you not instead be looking at the diff between the 37% wh rate and 30% FDAP rate for refund of 7% wh?
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- Joined: Thu May 20, 2021 2:58 pm
Re: K1 revenue inside an RRSP - can I get the 37% tax reduced?
Well I don't know. That's why I am asking!
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Re: K1 revenue inside an RRSP - can I get the 37% tax reduced?
Seems to me that if I file US taxes I am subject to the same taxation rate as a US citizen. Which in the example I give above, would put me qat 12%. FDAP would have nothing to do with it.
Re: K1 revenue inside an RRSP - can I get the 37% tax reduced?
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
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Re: K1 revenue inside an RRSP - can I get the 37% tax reduced?
Good link, but ultimately doesn't answer my question. The article is specific that investments held in RRSP's (mine are) are beyond the scope of the article. It also provides not advice regarding getting a refund by filing in the US and showing income taxes at a lower tax rate than the withholding tax.
Re: K1 revenue inside an RRSP - can I get the 37% tax reduced?
The link was in response to 'nd's questions.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing