Defer RRSP for previous years?

[bmeutzner]

Hi there,

First want to mention how great this forum is... a big thanks to those who maintain/moderate/answer questions for poor Canadians like me living in the US :-)

Unfortunately, I was woefully unaware of the RRSP implications on my US tax return, and have not filed for deferment on either of my 2005 or 2006 US tax returns since moving to the US in July of 2005. So hopefully I can get some insight into my particular situation.

As I mentioned, I moved to the US in July of 2005... dates dictate that tax residency was still Canada for 2005 filing, although I also did file a US return for partial year in 2005. In the spring of 2006, prior to 2005 tax year filing deadline I contributed 23k and change to max out my available RRSP contribution limit against my 2005 taxes owing for Canada. I was technically living in the US at that point, and no longer a resident of Canada at the time of contribution.

I am a dual-citizen... and became one (by virtue of US mother now living in Canada) about a week before leaving Canada in 2005 not sure if that changes situation at all.

So... my dilemma...

1) Am I in hot water for contributing in 2006 while a resident of US, even though I was contributing for 2005 CA tax year.

2) Am I able to "nicely" notify the IRS that I was unaware of the RRSP obligations, and request deferment for all previous years in which I filed US returns (2005, 2006, and now 2007).

3) I'm sure other folks have had this problem before as well... but given the RRSP status of my investments, my financial institution in Canada does not provide me with detailed gain/loss statements which it seems you'd need to file form 8891 and any others for IRS.

To make things more interesting I really have no capital gains to report from my investments within the RRSP aside from a few dividends... otherwise market has not been kind, and I have nothing but capital losses.


Thanks in advance to any folks that offer some insight into this. I'm likely going to be contacting an accountant this week (Mr. Serbinski can expect my call :-) but figured I'd post here first to get a handle on it. This situation has suddenly become very scary, and I'd just like to get it right now, so it doesn't bite me in the butt down the road.


Brendan

[nelsona]

Look for 8891 in this forum.

[bmeutzner]

Thanks Nelson.

So if I understand this correctly.

1) I don't worry about submitting an 8891 for 2005 (no money in RRSP account even though Spring 2006 contribution was for 2005 tax year).
2) Submit for 2006 and each year moving forward, with 2006 marked as first year by checking "No" on line 6a.

This is really kind of a 180 degree turn from how I originally thought the IRS viewed RRSPs. It sounds like they don't care when I contribute, just as long as I notify them of any distributions? I was all worried about getting dinged because I made the contribution "after" I was a US citizen.

Thanks again for all the past help on the boards which has proven to be a fantastic resource, and HUGE wealth of information.


Brendan

[bmeutzner]

A tip to other searchers... use the "+" sign :-)

eg. RRSP +8891 +previous +years will return documents which contain only "ALL" of those terms :-)

Might be a simple concept for a lot of folks, but I didn't clue in right away ;-)

[nelsona]

Since 2003 the IRS cares VERY much about even the existence of RRSPs. Before they cared about only the yearly income it generated, regardless of any actual distributions. That is the reason for the various reporting mechanisms over the years.