LIRA unlocking and RRSP tax calculation

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chelavnzuo
Posts: 25
Joined: Wed Mar 22, 2017 1:08 pm

LIRA unlocking and RRSP tax calculation

Post by chelavnzuo »

Q1. for LIRA unlocking, I understand that we need to wait two years as non resident and fill out NR73, but once LIRA is unlocked, does it automatically become a part of RRSP or this year's taxable income?

Q2. for RRSP, say 40k is the true cost basis when I funded it in Canada, on the day I moved to the US, the account value was 50k, and now it's more than 50k. Is my understanding correct that if today I withdraw 50k, 25% will be taxed by CRA, and nothing more will be taxed by IRS?

Q3. still for RRSP, if my understanding is correct in Q2, how can I let IRS know that this 50k income from Canada should not be taxed further in the US (after the 25% by CRA) because this amount is the account value on the day I moved to the US?

Thanks!
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
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Re: LIRA unlocking and RRSP tax calculation

Post by nelsona »

1. LIRA unlocking requires that you withdraw the LIRA, so it becomes part of that years income. LIRAs/ since they come from company plans, are 100% taxable in US. There is no non-taxable portion, unlike private persoanl RRSPs/RRIFs.

So, if you have a persoanl RRSP, DO NOT mix in any LIRA money if at all possible.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: LIRA unlocking and RRSP tax calculation

Post by nelsona »

As to letting IRS know how much of a persona; RRSP is taxable, once you determine it, you put it on the OENSION line of your 1040, gross and net.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
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