Form 8891 questions here please!!!!

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nelsona
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Form 8891 questions here please!!!!

Post by nelsona »

No changes from the draft copy

http://www.irs.gov/pub/irs-pdf/f8891.pdf


IRS has recently announced a new Form 8891 to report/defer yearly RRSP income.

Its release date has been pushed back several times, but <b>it will be required for the 2004 tax return.</b>

Its aim is to consolidate all the Revenue Procedures and Notices that have appeared over the last 15 years.

Watch this space for further announcements.

<i>nelsona non grata</i>
nelsona
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Post by nelsona »

The release date has ben pushed back until Feb 7th. I would not expect it to be released on that date either given IRS track record.

<u><b>Form 8891 and e-file</b></u>

Remember, 8891 is not part of either off-the-shelf software packages, and thus will not be e-filed. I would suggest that any requiring this form who are now waiting to e-file, GO AHEAD and e-file, especially if you are not going to report any RRSP income from 2004 (ie. are using the deferral and have not made any RRSP withdrawals).

All of us will have to submit 8891 on paper separately from or e-file anyways. This has worked in previous tax years for the RP 89-45 and 02-23 statements.

Those of you are ARE reporting income (either because you elect not to defer yearly, or are reporting partial taxation of an RRSP withdrawal on 16 b of 1040) should probably wait at least until the form instructions are released, just to avoid any surprises.

<i>nelsona non grata</i>
nelsona
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Post by nelsona »

Form 8891 is still nowhere near being posted, and its author Willard Yates, has advsed some in the industry to merely file Statements in compliance with RP 02-23 and Notice 03-75, as last year.

As I have said previously, neither the statements not the Form are part of any commercial software package, and would have to be prepared separately.

E-filing is still possible with either method, just send them along a month later with a 1040-X.

<i>nelsona non grata</i>
Greg
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Post by Greg »

Hi All

The question I have is on line 8.

If you checked the “Annuitant” box on line 5, the “Yes” box
on line 6a

I guess I'm just Misunderstanding this part because of no and/or statement in the question, but does both things listed above need to be True, or just one? too stop here.

In my situation I have the Beneficiary and the yes box checked on line 6a.
nelsona
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Post by nelsona »

Actually it says:"If you have checked the "Annuitant" box on line 5, the "Yes" box on line 6a, <u><i><b>or</b></i></u> the box on line 6c, stop here"


Seems pretty clear to me, if any or all of these apply, stop here.

In other words, if you are a "beneficiary", <u>and</u> have not made the election, <u>and</u> are <u>not</u> making the election this year, fill in lines 9 and 10, and add the income to your return. otherwise stop at 8.



<i>nelsona non grata</i>
Greg
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Post by Greg »

Thanks Nelson, this is what I thought just wanting to make sure.

Thank you.
Spring
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Joined: Tue Mar 08, 2005 12:21 am

Post by Spring »

finally we are here.....

My question is, if I checked 'yes' on 6a, and no distribution for 2004, then my 7a/7b would be 0 and just need to fill 8 for the balance, is this correct? also what's the rate for US:CA conversion of 2004?

Thanks a lot. Happy filing[:D]
MaggieA
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Joined: Sun Oct 31, 2004 4:06 pm

Post by MaggieA »

Re currency conversion, I believe you can use any reasonable source for the rate. Here is one:

http://www.bankofcanada.ca/en/exchform.htm

Just enter the date you need (Dec 31 2004 in this case) near the bottom of the form. Otherwise it gives you the current rate.

Thanks to quick notification of 8891 availability on this forum, I mailed off my 1040X with 8891s attached on Saturday already. All done for 2004!
nelsona
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Post by nelsona »

Maggie, I assume you already got your refund?

As I advised earlier, it is best not to mail in any 1040-X until well after one gets their refund, so as not to interupt processing of your original return.

<i>nelsona non grata</i>
MaggieA
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Post by MaggieA »

Yes - but good idea to remind others to wait for the refund.

I E-filed via Turbo Tax first weekend in February and received both refunds within a few days.

Therefore presumed it was perfectly safe to file 1040X last weekend.
nelsona
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Post by nelsona »

I wouldn't necessarily have wanted to be the first person to submit my 8891's.

No doubt the chances of you being a test case are very high now.

<i>nelsona non grata</i>
MaggieA
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Post by MaggieA »

Wow, what an interesting thought. Didn't occur to me that there would be anything special about this.

Well, our RRSPs, income, deductions, etc. are all very boring and conservative. So I hope (gulp) that extra scrutiny couldn't be too harmful.

I'll keep the forum posted if anything transpires.
orillia4
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Post by orillia4 »

So do we assume now that the 8891 form is available we should submit it with our return?
nelsona
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Post by nelsona »

Of course.

The form is already mentionned in the 1040 instructions, and in the form 3520 instructions, so IRS is expecting it.

If you've already submitted your paper 1040 (prior to the release) and include a RP 02-23 statement, that is fine.

But if your sending in your 1040 now, the Forms should go with it.

Otherwise, a 1040X with the new forms is in order.


<i>nelsona non grata... and non pro</i>
orillia4
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Post by orillia4 »

What is the purpose of line 6C on form 8891? In my reporting of RRSP's to date I have mentioned the Article XVIII(7) but have never used the RP 02-23 text in my reporting. I have used a letter I received from an accounting firm many years ago.

For any previous years where the RP 02-23 was not used would someone need to file the 8891 for those years along with a 1040X?
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