Cashing Out RRSP Early to Move to US Investments

[spachick]

I have been a green card holder in the US since 2004.
I want to cash out my RRSPs in Canada and move the money down here to invest it into other US investments ie: Roth, 401k.

Here is what I know and please help me fill in the blanks.

-I will take a 25% hit -thanks Canada
-I don't want to move it into a RRIF.
-There may be some early withdrawal fees from the funds themselves - thanks again Canada
- I can deduct these hits on my US tax return via IRS form ##??
-I don't think I need to fill out any Canadian tax forms, since I think my financial adviser will probably have to do that???
-I suffered a huge loss on what the original value was on the RRSP since th time I left Canada to what it is now. Is there tax relief in the US for that since there isn't a capital gain?
-Is there ANYTHING else ie: IRS tax forms, information or strategy to make this transition go smooth since what I am gathering on the site, trying to get an accountant down here that understands the law is either quite expensive or non-existent. HELP!!!

[spachick]

if you can just direct me to detailed link in the forum or a detail link on the site/FAQ, I would be grateful.

[nelsona]

Have you been correcty reporting your RRSP while living in US? That needs to be taken care of.

[spachick]

No I have not. I had no knowledge that the 8891 had to be done until reading through this forum this weekend.

Quite frankly, from reading through the forums, I am not surprised that so many Canadians are/were unaware to fill out this form. I remember when I moved down here, it was IMPOSSIBLE to find someone who knew anything about Canadian investments and how it impacted doing taxes here in the US. And trust me, I looked.
So if I need to follow the rules now, fine - live and learn.

Should I take care submitting the 8891 formS to the IRS first before cashing out or can I cash out then submit the forms for the number of years I have come to the US? I really want my money out of Canada - this week. My FA is moron and he's the only one making money on my investments.

[nelsona]

You need to taker care of back-filing FBAR and 8891 before next taxa season -- when you will report the disposition of your RRSP, so you can cash out now if you wish. Jusy make sure you catch up for past years before filing your 2013 return.

This forum has been here for a decade.

There is a box on the bottom of schedule B, which needs to be filed every year with any return, that specifically alerts one of the need to file special forms if one has any foreign accounts.

But, yes, you are not alone in not knowing this, if that is any consolation.

[spachick]

What is FBAR?
Thanks for your assistance on this.

[CdnAmerican]

FBAR is a form that's required when you have foreign accounts that together sum to more than $10K (I think that's the cutoff). These have to be filed every year. People have backfiled with a letter of explanation, and that seems to be typically sufficient. But you may have to backfile several years. There are lots of threads on here with detail about it. It's not a hard form, but is an important one and is a kind of a pain.

[John_moneyguide]

This is a request for Nelsona (PMs don't seem to work on the forum):

I have some questions on my forum that are US related that I don't feel comfortable answering. I would be grateful if you could take some time to offer your expertise.

Here are the posts:

http://themoneyguide.ca/forum/showthrea ... plications

http://themoneyguide.ca/forum/showthrea ... uver-BC%29

Thanks for your time and sorry for the intrusive nature of the thread reply.

J

[nelsona]

Please ask your questions on this forum (in your own thread, please). Why would I answer questions posed on another forum here.

[John_moneyguide]

Hi Nelsona

I was hoping that you could sign up to our forum and post an answer for our members....

http://themoneyguide.ca/forum/register.php

Just thought I would ask.

Thanks for your time.

J

[nelsona]

No, I prefer cross-border issues. You can always point them over here if you wish.

[John_moneyguide]

But these are all cross border tax issues:

http://themoneyguide.ca/forum/forumdisp ... a-Taxation

I would post them here, but they are questions from members of the moneyguide.ca forum and they would need to be answered on that forum.

If you can't answer the questions on the moneyguide forum I understand.

Thanks again.

J

[nelsona]

I meant to say, I prefer to restrict my internet invovement to cross-borderforums.

As I sais, you can always point them to thsi forum to get cross-border issues answered. Cdn moneygude is to general for my tastes.