Canadian citizen inherited a Roth and Traditional IRA.
Moderator: Mark T Serbinski CA CPA
Canadian citizen inherited a Roth and Traditional IRA.
I'm 74 years old and I have just received inherited IRAs from My mother. A Roth and a traditional IRA. Both IRAs are in stocks. When I sell the stock and bring the money to Canada I think I will have withholding tax of 15% on the traditional IRA and maybe I will owe tax here in Canada. I think the Roth IRA should be tax free in the U.S. and Canada. Any advice or clarification would be greatly appreciated.
Re: Canadian citizen inherited a Roth and Traditional IRA.
If you collapse the IRA it will be subject to 30% withholding, as it will not be considered periodic. You can sometimes fight this down to 15%, but in any event it will all be taxable in Canada too, so you can use the 30% as a credit.
The Roth distribution will be tax-free in both countries, assuming that the actual Roth account was created more than 5 years ago.
The Roth distribution will be tax-free in both countries, assuming that the actual Roth account was created more than 5 years ago.
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Re: Canadian citizen inherited a Roth and Traditional IRA.
Thank you for the clarification! If I cash out the ROTH IRA this year do I still need to file an election to the Competent Authority Services Division this year to make it tax free?
Re: Canadian citizen inherited a Roth and Traditional IRA.
It would be wise, since you need to report the income and then deduct it on line 256, so the Roth election would be useful to prove the treaty benefit.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing