On the Schedule B there is a question around whether I received a distribution from, or was the grantor of, or transferor to, a foreign trust.
I used to answer Yes to this questions in the past since I have RESPs for my children in Canada.
Do I now need to answer NO to this question given last year's exclusion rule of RESPs on 3520 and 3520As?
I also have RRSPs but I wouldn't think that this question wouldn't apply and it would still now be a NO.
Thanks in advance.
Regards
How to answer the question on Schedule B for RESP - about distribution from or whether a grantor of foreign trust
Moderator: Mark T Serbinski CA CPA
Re: How to answer the question on Schedule B for RESP - about distribution from or whether a grantor of foreign trust
RESPs are still considered trusts, like RRSPs. It is just that, like RRSPs, one does not have to file a 3520 for them.
So, you still check YES.
And it was always YES for RRSPs as well.
Answering YES has never forced one to file a 3520.
So, you still check YES.
And it was always YES for RRSPs as well.
Answering YES has never forced one to file a 3520.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: How to answer the question on Schedule B for RESP - about distribution from or whether a grantor of foreign trust
'Answering YES has never forced one to file a 3520' it has only created nightmare for a number of filers who at best got IRS to rescind $10,000 penalty assessment per instance and ongoing administrative hassle. Why is that questions asked on 1040?To red-flag yourself as possible being required to file 3520. If you are not required to file 3520 (say RRSP/RESP), think twice before answering 'yes'.
Re: How to answer the question on Schedule B for RESP - about distribution from or whether a grantor of foreign trust
I have always correctly answered yes and never gotten a flag.
RRSP and RESP are indeed foreign trusts (the recent Rev Proc even says so for RESPs). They simply do not require 3520.
RRSP and RESP are indeed foreign trusts (the recent Rev Proc even says so for RESPs). They simply do not require 3520.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: How to answer the question on Schedule B for RESP - about distribution from or whether a grantor of foreign trust
People may extrapolate from RRSP/RESP to TFSA and find themselves needing lawyer resolution with IRS described here:https://polaristax.com/an-update-on-for ... -the-tfsa/
Re: How to answer the question on Schedule B for RESP - about distribution from or whether a grantor of foreign trust
Our poster hasn't mentioned anything about a TFSA.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: How to answer the question on Schedule B for RESP - about distribution from or whether a grantor of foreign trust
Thanks Nelsona for mentioning TFSA. Good chance to plug a warning about an extrapolation I see people make from RRSP/RESP to TFSA.
Re: How to answer the question on Schedule B for RESP - about distribution from or whether a grantor of foreign trust
If one has an RRSP, does one always check yes to the checkbox question on Schedule B about receiving a distribution from, or was the grantor of, or transferor to, a foreign trust? I get that it's a foreign trust, but does one always check yes every year OR would it only be yes for those years when one makes a contribution to the RRSP? (I'm uncertain what a grantor means.) Thank you.
Re: How to answer the question on Schedule B for RESP - about distribution from or whether a grantor of foreign trust
Yes, always check that box.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing