RRSP

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Mquinn
Posts: 2
Joined: Thu Mar 06, 2014 2:07 pm

RRSP

Post by Mquinn »

Hi,
I moved from Canada to the US 10 years ago. I had about $20000 in a RRSP. I have been cashing out the last 3 years to the amount of $ 5000 per year and gave the money to my parents each time. That money was already in my Canadian account before I moved to the States. Do I need to declare it? If so how to I proceed with that.
Thanks
Mike
nakubo.1974
Posts: 32
Joined: Sun Feb 16, 2014 1:01 am

Post by nakubo.1974 »

Hi Mquinn, you would at the very minimum need to file Form 8891 and FinCEN Form 114. You may also need to file Form 8938 if you have other non-US holdings exceeding the threshold amount.

Look into the following websites.
http://www.irs.gov/uac/Form-8891,-U.S.- ... ment-Plans.
http://www.irs.gov/uac/Form-8938,-State ... ial-Assets
http://www.irs.gov/Businesses/Compariso ... quirements
http://www.fincen.gov/forms/bsa_forms/
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

And yes, some of this is taxable on your 1040.

But you need to get all your 8891's in order first, as you are in severe violation of trust rules ans well as foreign reporting.

Yikes!
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
Mquinn
Posts: 2
Joined: Thu Mar 06, 2014 2:07 pm

Post by Mquinn »

Thank you both for the info. My CPA will help me with that. I am sure I can find a good tax attorney in the Seattle area. Many Canucks here.
Cheers
worryfreeinvestor
Posts: 145
Joined: Thu Mar 24, 2005 6:17 pm
Location: Seattle, WA

RRSP: 8891 and FATCA FINCen 114

Post by worryfreeinvestor »

My question is a little different. I am a citizen of both Canada and the U.S. and resident of the U.S., where I continue to work full-time (i.e. taxable resident of U.S.). I moved to U.S. to work in 2005 (and became naturalized in 2014).

I have reported the value of my (and my spouse's) RRSPs on 8891 faithfully from 2005 through 2012. The RRSPs are worth more than $50,000 and we do not take any distributions from them.

I have never reported those RRSPs on FATCA/FINCen 114, and I never thought of it until now (because I'm doing my 1040 for 2013). I suspect that I do have to file FATCA/FINCen 114 for those RRSPS (even though common sense says it is duplicative of 8891), right?

There is no tax due, so I hope I won't be fined. Is that a reasonable expectation? Grateful for any advice.
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

You have violated FBAR rules and are subject to fines. You need to fix this.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
worryfreeinvestor
Posts: 145
Joined: Thu Mar 24, 2005 6:17 pm
Location: Seattle, WA

Post by worryfreeinvestor »

Thank you. What steps would you recommend to "fix it"? My situation is much simpler than the other ones I see here.
rohitkn@gmail.com
Posts: 30
Joined: Sun Mar 30, 2014 1:09 pm

Post by rohitkn@gmail.com »

what nelsona is saying is that: for 10 years you did not make an election to defer income in your RRSPs.

if your RRSPs grew, those gains were subject to taxes.
Even if they grew just a little bit and the gains were tiny, you were still liable to have made an election.

Then there's a BS of fbar. You can probably rectify it. But get to it is what nelsona is saying.
worryfreeinvestor
Posts: 145
Joined: Thu Mar 24, 2005 6:17 pm
Location: Seattle, WA

Post by worryfreeinvestor »

Thank you. As I note in my original post, I made the 8891 election in 2005 and every year since. So, my 1040s are accurate. It is only FBAR that concerns me. Do you think they'll fine me for never having filed FATCA/FinCEN 114 (or whatever its predecessor was called)?
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

rohitkn, you can even have taxable income when your RRSP LOSES money, when it tdistributes dividends.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
rlb
Posts: 139
Joined: Thu Feb 17, 2011 8:51 pm
Location: NB, Canada

Post by rlb »

worryfreeinvestor: Since you have faithfully filed the 1040/8891 forms regarding these accounts and their income, they will not fine you for failure to file the FBAR forms, assuming you plead reasonable cause and they agree. But you need to back file the FBAR forms immediately. As of last July 1, it is now required to do this electronically through FinCEN. I think I remember reading there is now an opportunity to add your reason for late filing (reasonable cause); you will tell them that you have only just become aware of the requirement, but have filed all income and 8891 forms required. (If you can't add that yet, just submit through FinCEN, and respond with the reasonable cause letter if they get back to you).

Remember that once the need for FBAR is triggered, you need to report ** all ** your foreign accounts, even those with minimal amounts in them.
ChromiumDioxide
Posts: 36
Joined: Mon Apr 07, 2014 6:43 pm

Post by ChromiumDioxide »

@Mquinn

Hi, I'm in Seattle also and looking for a CPA to deal with issues such as this, did you manage to find a good one in the Seattle area?
rrspresp
Posts: 8
Joined: Tue Apr 08, 2014 11:59 pm

Post by rrspresp »

I'm also looking for a CPA to backfile 8891, 3520a, etc. If you have a good one, please share the info. I really have no clue how to start. Called several CPAs and got different answers. Don't know which one I should trust.
rrspresp
Posts: 8
Joined: Tue Apr 08, 2014 11:59 pm

Post by rrspresp »

I'm also in Seattle area.
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