RRSP / HBP Help

Ingtar17 · Post by **Ingtar17** » Fri Oct 10, 2008 1:05 pm

Ok - I get it. And my total contributions would be the addition of yearly contributions converted to USD using the exchange rate for its particular year. And the income reported as taxable would be in USD for using exchange rate for the year THAT was reported. So given that the Canadian dollar has skyrocketed over the past few years, I will have a smaller non taxable portion (basis?) than I would have if the exchange rates stayed the same. Bummer.

Ingtar17 · Post by **Ingtar17** » Fri Oct 10, 2008 1:20 pm

Last Question - I promise!

You previously said: "However, in a year in which you take an HBP withdrawal, you must then also include any previously elected income as taxable income on your 1040. So any internal income that your RRSP generated in 2001 and 2002 (interest, dividends, cap gains) should be reported on your 2002 1040 as taxable income, since it can't be sheltered."

What if that income is negative? Do I put $0?

Thanks a bunch! You've been a great help and are a wonderful person for providing this forum.

Geoff

Ingtar17 · Post by **Ingtar17** » Fri Oct 10, 2008 1:33 pm

Ok, I know I said last question, but this comment is not adding up in my mind (I know I've asked a ton of questions so I don't mind paying a reasonable consulting fee to keep asking - e-mail onegreenpaperflip@hotmail.com if this is required - or just tell me to go away and I will):

"Your non-taxable portion will be your contributions plus any income you reported as taxable. Your HBP was not reported as taxable, so doesn't reduce your eventual taxable portion."

In my mind, the HBP HAS to either reduce the taxable portion or the untaxable portion. If I have 3000 worth of untaxable (contributions) and $3000 worth of taxable (gains) and then I withdrawl $2000 for HBP, then my balance is now $4000 and I can't still say that $3000 is untaxable and $3000 is taxable. One of them must have decreased by $2000. No? I'm not trying to debate - just understand. I'm obviously missing something.

nelsona · Post by **nelsona** » Fri Oct 10, 2008 3:03 pm

perhaps an example will be clearer:

all figures in USD.

You contrib 4K in 2001
You contrib 4K in 2002.
You HBP 5K in 2002. In 2001 and 2002, your RRSP produced $500 of income. In other words you had $3500 left in your RRSP at end of 2002: 8000 in contribs and $500 of gains minus the $5000 HBP.

Since you will now include $500 of income on your 2002 return, your 'non-taxable' stake in your RRSP is now $8500, which is your original contribution plus the income you report on your 1040.

Note that your HBP had no impact on this, other than it forced you to report $500 in accrued income.

Going forward, whether or not you repay your HBP year-by-year, the $8500 amount form 2001 and 2002 does not change. The only thang that will change it is contribution (plus) or taxable income reported on 1040(minus).

Ingtar17 · Post by **Ingtar17** » Sat Oct 11, 2008 9:22 am

Ok.

And what if the RRSP had a loss of $100, instead of producing $500? Then do you put $0 in the taxable portion, or somehow deal with the -100?

Ingtar17 · Post by **Ingtar17** » Sat Oct 11, 2008 10:55 am

So

If I repay $1000 to HBP in 2003, then this would be just be considered as another contribution, so the non-taxable stake would become $3000?

Also, wouldn't taxable income reported on form 1040 be 'plus' instead of 'minus' just like you added the $500?

Ingtar17 · Post by **Ingtar17** » Sat Oct 11, 2008 10:56 am

Oops - Typo in the last post - the $3000 figure should have been $9500.

nelsona · Post by **nelsona** » Sat Oct 11, 2008 8:38 pm

As I have said at least twice the HBP repays, or the HBP non-repays are non-events in terms of US. They don't change your non-taxable portion.

As to the case where you had a loss in the years prior to HBP, it still doesn't change your non-taxable portion. You wold report '0' taxable, and nothing would chamge.

Remember: your non-taxable portion is your contributions plus any income you report on your 1040.

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