8838 - max. value to include accts closed?

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marge
Posts: 66
Joined: Mon May 09, 2005 1:26 pm

8838 - max. value to include accts closed?

Post by marge »

I've filled out 8838 with a lot of help from this forum--thank you!--but I haven't found the answer to this. I converted my RRSP to a RRIF at the end of 2014, and all my holdings were first transferred into one RRSP first. The result is that the maximum value in all the accounts was more than double the real maximum value for 2014. Do I just add up the maximum amounts? It seems such a false number.

Thanks for any help you can give,
Marge
K104XYZ
Posts: 18
Joined: Sun May 18, 2014 11:05 am
Location: Calgary AB

Post by K104XYZ »

marge,

For the purposes of determining the Form 8938 filing threshold (page 3 of Form 8938 instructions) you look at the total value of the assets on the last day of the tax year or the total value “at any timeâ€￾ during the year. It seems clear that, for that purpose, you would definitely not double count your transferor and transferee accounts, because on “any given dayâ€￾ or “at any timeâ€￾ (including the date of transfer) the money is in either the transferor account or the transferee account only, and not both.

For the purposes of Line 2 in Part II of Form 8938, it is less clear. It just asks for the maximum value of all assets.

Meanwhile, you have to report in Part VI each individual asset with its own individual maximum value at any time during the year (Form 8938 instructions, middle of page 5, and Part VI Line 4 instructions, page 9).

So, yes, if you add up all of the “maximum values at any time during the yearâ€￾ of each individual asset reported in Part VI, then the sum of the transferor and transferee accounts would be approximately double of what the true aggregate amount was on any given day, as you say.

So that makes it unclear what to report on Line 2 of Part II. I had the same question in my mind when I was filing my 2014 Form 8938, since I did some RRSP account transfers as well.

It seemed to me (in the absence of clearer instructions for Line 2 in Part II) that it would make the most sense to calculate the amount to be reported on Line 2 of Part II in the same manner as the way the amount would be calculated for determining the reporting threshold – in other words, no double counting the transferor/transferee accounts – just figuring the maximum value of the aggregate assets on any given day or “at any timeâ€￾.

When I reported each individual RRSP asset in Part VI, I reported the account transfer dates in Line 3. For the transferor accounts, I showed the date of transfer on Line 3b as the date asset disposed of, and for the transferee accounts, I showed the date of transfer (same exact day) on Line 3a as the date asset acquired. That way, it was recorded that only one of the accounts (either the transferor account or the transferee account) was in existence on any one given day.

Anyway, that’s what I did. Hope that it might help you decide what to do
marge
Posts: 66
Joined: Mon May 09, 2005 1:26 pm

Post by marge »

Yes, it helps a lot! It makes much more sense to interpret the summary portion of the form as applying to the maximum total in all the accounts during the year. I also added next to "RRSP" in the description of the account, "transferred to RRIF below," so iIt should be clear to the IRS...I hope!

thank you very much!
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