Advice needed on exit tax

thor7000 · Post by **thor7000** » Fri Nov 30, 2012 11:53 pm

Hello, here is my situation....I obtained an L1A visa this September and have a residence in Florida along with our primary house in Canada....I am currently travelling back and fourth right now but plan to live in the U.S on a permanent basis once we get our visa extension. I have listed our house in Canada for sale and do have RRSP's...my question is this....since I am on a L1A visa which currently is only good for 1 year and I am travelling back and fourth, hopefully we will sell our Canadian house in the next 2-3 months and then I would rent an apartment until we get our visa extension, will I be hit with a "exit tax" on the funds from our house sale?? Should I begin to sell off my RRSP's or is there a way I could transfer them into an IRA?? Any advice or suggestions would be appreciated.

nelsona · Post by **nelsona** » Sat Dec 01, 2012 11:03 am

You are not taxable on your house if you sell it one year after leaving canada or 3 years after entering US, so no worries on that.

You should not collapse RRSPs until you have fully departed canada, otherwise it will be taxable in canada at your regular rates instead of 25%. And do not start any kind or roth or roth401(k) until yiou have fully left either.

You cannot roll RRSP into IRA or any other tax-sheltered plan. you can of course use the funds after the collapse, to fund all sorts of tax-advantaged investments, like your home, or you can use the money to make your yearly contributions to IRA/Roth etc.