8891 questions and a suggestion

[juf2m]

Hi again,

First my suggestion. There are SO MANY threads about 8891 with so many individual scenarios, it is quite difficult to find the basic info. I'm wondering if it wouldn't make sense to put a sticky thread at the top with 8891 FAQs and instructions about how to fill the thing in?

Next my questions:

1) I just finished filing my taxes on Turbo Tax. I just realized that I put in the value in Cdn $ and not US$. Is it absolutely necessary to convert to US currency when filling it out? As it happens, I looked at the bank's exchange online and the difference is so minimal, only a couple of hundred dollars. Do you think it's OK to just leave it the way it is?

2) The first year I made the election was 2005. I assume that when I fill in 6B I continue to say 2005 every year, and this will mean that the election is current for every year moving forward? Or am I supposed to start from scratch each year and put in the current year (2007)?

3) When you tick off that you are the beneficiary it says in the instructions that a beneficiary must only complete lines 1 through 8 of the
form. I did that last year, and never did anything with 9 or 10. I never make contributions anyway, and I have purely mutual funds for my RRSP, so there is no info on my statements that deals with income, dividends, etc. Is it OK that I only put in the plan value at the end of the year and that's it?


Any help you could send my way would be hugely appreciated.

[nelsona]

This website, although full of my grewat information is not managed by me, and isn't managed at all quite frankly.

There is nothing stopping you from adding to one of the threads you find and bringing it back to the foreground I guess.

1. The IRS is in the US. They deal ONLY in USD. CRA deals ONLY in Cdn$

2. It asks when you FIRST made the election.

3. That is all. But in general, you are rsponsible for tracking your income over the years for when you start taking money out. I'm quite sure your statements do contain all that info though, like distributions etc,

[shsamardar]

Hi

I just noticed in form 8891, there is a line number 10 titled

UNDISTRIBUTED earnings of the plan during the year


in my case, I didn't get any distributions from the plan, but the mutual funds within the plan had dividents and capita l gains that all WERE REINVESTED in the plan and bank bought more funds with those money.


DO I have to report those earnings in this form?
If yes,

Under of this line, there are items like interest income that we have to report on form 1040 , line 8a , ordinary income in line 9a, etc

that means although I din't have any distribtuion out of plan but becasue of those earnings within the plan I have to report , therefore pay taxes now.

Is my understanding correct?


Thank you very much

[nelsona]

Read the form. Those lines are for those who do NOT elect to defer taxation on their RRSP.