Cashed in RRSP - never filed 8891

millerh · Post by **millerh** » Thu May 16, 2013 6:16 am

We just cashed in our RRSPs in 2012 and we've had our tax returns on extension and would like to file. Seeing as we never made an election to defer and never took a distribution from them in prior years, how should we answer the question on deferring income?

Is this one of those cases where one needs to back-file a boat load of papers first to indicate the election and then one would be able to say on the 2012 F8891 "yes, the election was made in xxxx year"? I realize this question may have been asked before, but with all the stuff we've been through with "professionals", it's hard to get what seems to be a simple and honest answer.

Any help would be appreciated.

nelsona · Post by **nelsona** » Thu May 16, 2013 10:07 am

Since Jan 1 2013, you need IRS permission to back-date the election, so that one option for you. You can no longer go back and make the election, say, for 2006, and then simply submit 6 'clean' 8891's for the subsequent years.

Otherwise you need to file 8891 without the election, report all the internal income on your 1040s for upto the last 6 years, and pay tax intersert and penalties.