Guidance on Form 8938 with respoect to RRSPs

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nelsona
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Guidance on Form 8938 with respoect to RRSPs

Post by nelsona »

With removal of 8891, now RRSPs must be reported in detail on Form 8938.

Part IV Reporting Not Available for
Former Form 8891 Filers.
Beginning in 2014, a specified
individual with an interest in a
Canadian Registered Retirement
Savings Plan (“RRSPâ€￾) or Registered
Retirement Income Fund (“RRIFâ€￾) and
who is required to file Form 8938
cannot satisfy his or her Form 8938
reporting obligations regarding the
RRSP or RRIF under Part IV,
Excepted Specified Foreign Financial
Assets. Instead, such specified
individual must report such assets in
Section VI, Detailed Information for
Each “Other Foreign Assetâ€￾ Included
in the Part II Summary. This is
because, beginning in 2014, U.S.
citizens and residents are not required
to report an RRSP or RRIF on Form
8891, “U.S. Information Return for
Beneficiaries of Certain Canadian
Registered Retirement Savings
Plans,â€￾ and Form 8891 has been
obsoleted.

So, if you meet the threshold for 8938, you must report detailed RRSP holdings.
I am taking my usual break from this site until May. Always too many tax-form specific questions at this time of year...
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
nelsona
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Post by nelsona »

So, now that RRSPs are to be reported in Part VI (not Part V, since it is a foreign trust) how are you doing this: reporting the RRSP as a whole, or reporting each investment.
I am taking my usual break from this site until May. Always too many tax-form specific questions at this time of year...
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
rafa02
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Joined: Sat May 26, 2012 3:18 pm

Post by rafa02 »

It is a bit unclear, but in previous years, RRSP's could be reported as an account (without listing individual stocks, etc.), and I have not seen anything from the IRS indicating this has changed, so I would think we could simply list the RRSP account (s) in section VI as an asset.
rafa02
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Joined: Sat May 26, 2012 3:18 pm

Post by rafa02 »

Also, it appears that the IRS has attempted to make RRSP/RRIF reporting simpler, and to require reporting individual stocks/holdings,etc., would be counter-intuitive.
nelsona
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Location: Nowhere, man

Post by nelsona »

In previous years RRSPs were covered by 8891, so, there has never been any RRSP detail reporting in Part VI on 8938.

while we might wish for consistency from IRS that is rarely the case.
I am taking my usual break from this site until May. Always too many tax-form specific questions at this time of year...
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
rafa02
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Joined: Sat May 26, 2012 3:18 pm

Post by rafa02 »

I hear you and I want to be cautious making any assumptions RE common sense and the IRS; however, it seems to me that previously reporting RRSP/RRIF with 8891 was simple and effective and the IRS is making it more simple and universal by eliminating the need for 8891. Why would it be more detailed and difficult?

As you know, previously we could omit further reporting of the RRSP by checking the appropriate box that 8891 was included, so now there needs to be some other way to report the RRSP, hence section VI. In the absence of explicit instruction from the IRS to the contrary, it seems reasonable to me to replace the consolidated 8891 form with consolidate reporting in section VI.
voribo
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Joined: Mon Aug 04, 2014 1:59 pm

Post by voribo »

well, my take on this is that RRSP and RRIF reporting for those needing to file an 8938 will be like reporting for any employment pensions (not CCP or OAS of course). As per the new instructions Nelsona posted, use Part II ( “Other Foreign Assetâ€￾ Summary) to report the number of RRSPs, pensions etc and value. Any income is reported in Part III (2). The details such as value, where it is held , whether taxable..... etc is reported in Part VI. This is what I've been doing with my employer pension income except that I've been reporting address detail in line 7, not line 8 as the IRS says it wants for RRSPs. No complaints so far from the IRS.

So the reporting effort for those under the 8938 limit is now less and I think about the same for those who meet the threshold. I see no indication to report individual holdings.
no-pro
nelsona
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Post by nelsona »

Why would it be more detailed and difficult?
IRS just said it would be more detailed than before. That was my point in reporting this to the group.

Are all of you reporting TFSA's and RESP's as a single entity, or detailed. Whichever you are doing for these, you will have to follow for RRSPs.

Ah, but TFSA's and RESP's require 3520, do they not... so again, how are you going to file RRSP now that 8891 is gone (I'm asking how you WILL do it, not how you think others should do it).

Will you
(a) revert to 3520
(b) report the RRSP as an entity
(c) report the holdings individually.
I am taking my usual break from this site until May. Always too many tax-form specific questions at this time of year...
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
rafa02
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Joined: Sat May 26, 2012 3:18 pm

Post by rafa02 »

As I rea the instructions, I took them as simply replacing the 8891 reporting with Part VI, and previously the 8891 only required reporting the consolidated account, not individual holdings. Part VI does require "detailed information for each other foreign asset", but I took that to mean the RRSP as a whole, e.g. "description of asset" = Canadian RRSP, account # = the account # .

I do not see that there is now a requirement to breakdown each individual holding, just as a non-registered brokerage account does not require reporting each particular holding (at least I hope that is not required).

I had just completed my 8938 the day before this thread, and thought I had everything sorted out. I was intending to simply replace the info from my previous 8891 and apply it to this year's 8938, without any 3520, etc. Now, I suppose I will wait and see if there is any further clarification RE the reporting requirements.
rafa02
Posts: 86
Joined: Sat May 26, 2012 3:18 pm

Post by rafa02 »

IRS Simplifies Procedures for Favorable Tax Treatment on Canadian Retirement Plans and Annual Reporting Requirements
as per the IRS website:

http://www.irs.gov/uac/Newsroom/IRS-Sim ... quirements

It does not seem reasonable to me that individual reporting of each security, stock, etc. and/or requiring 3520, could be interpreted as simplifying.
voribo
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Joined: Mon Aug 04, 2014 1:59 pm

Post by voribo »

.at this point based on what I've read in the instructions and how I treat my employment pension...yes.. this is what I PLAN to do...

see http://intltax.typepad.com/intltax_blog ... rrifs.html
for another blog opinion (last paragraph)

as I indicated in my post I plan to report the RRSP as an entity, without details of the internal holdings, using Parts II and VI...part VI wants mostly the same information as the 8891 or the FINCEN.

rafa02 are you using Part II and if necessary Part III of the 8938?
no-pro
rafa02
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Joined: Sat May 26, 2012 3:18 pm

Post by rafa02 »

I am using Taxact software and it automatically adds the info for Part II and as there is no income for the RRSP, I do not see any requirement for Part III reporting the RRSP, although I also have a small RRIF income amount which I will be including on Part III.
nelsona
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Post by nelsona »

voribo, the post you linked doesn't have an opinion, it merely re-presents the press release from IRS
I am taking my usual break from this site until May. Always too many tax-form specific questions at this time of year...
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
K104XYZ
Posts: 18
Joined: Sun May 18, 2014 11:05 am
Location: Calgary AB

Post by K104XYZ »

Nelsona asks, January 17, "will you revert to 3520, report the RRSP as an entity, or report the holdings individually".

Section 5 of RP-2014-55 seems to say that reporting under IRC Section 6048 (Form 3520) is not required. Also that plan custodians are not required to file Form 3520-A.

In late December, the Treasury released TD-9706, Reporting of Specified Foreign Assets Final Regulations. Published in IRB-2014-53. It is a bit lengthy, but good reading alongside the IRS instructions for Form 8938. For example, TD-9706 points to Reg. 1.6038.D-3 which apparently says that "a specified foreign financial asset includes any financial account maintained by a foreign financial institution. An asset held in a financial account maintained by a foreign financial institution is not required to be separately reported on Form 8938". This might be a useful indication, if I read it right.

Hope the above is useful input to the discussion.
nelsona
Posts: 17014
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

We know that 3520 is not required. That has been the case for nearly 10 years, but that was because of 8891.

Moreover 8891 was the only thing that was allowing RRSP-holders not to report details of RRSP. That is now gone.
I am taking my usual break from this site until May. Always too many tax-form specific questions at this time of year...
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
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