canadian employer dcpp, 1040b question 8

DonB · Post by **DonB** » Thu Jun 19, 2014 12:52 pm

Two questions.

I am wondering if my employment-based defined contribution pension plan (RPP) is considered a foreign trust for the purposes of question 8 in 1040 schedule b:

"During 2013, did you receive a distribution from, or were you the grantor of, or transferor to, a foreign trust? If â€œYes,â€ you may have to file Form 3520."

If so, I don't think I need to fill out 3520/3520a, but do I need to demonstrate that?

MGeorge · Post by **MGeorge** » Thu Jun 19, 2014 1:15 pm

My understanding is, for a registered pension plan, provided that you didn't contribute to it (ie. only the employer did), then it is covered under treaty.
So, no 3520/3520A reporting, no FBAR FINCEN 114, but remember, you do have to report it on 8938.

nelsona · Post by **nelsona** » Thu Jun 19, 2014 1:43 pm

MG is correct, except that even if personally contributed to, no extra reporting is required.

The only decision at that point would be whether one included their contribution as income on their 1040, or takes the treaty position and deducts it from wages on their 1040.

DonB · Post by **DonB** » Thu Jun 19, 2014 2:22 pm

Just to clarify: it would be correct to say that I DID NOT "receive a distribution from, or were you the grantor of, or transferor to, a foreign trust". ..?

nelsona · Post by **nelsona** » Thu Jun 19, 2014 2:33 pm

In muy opinion, I would tick "YES" to the box. This does not mean that you need 3520, but it is a foreign trust. It is the treaty that excuses it from 3520 reporting.