Date for RRSP Book Value

[jewel]

Hello,
If someone filed a 1040 on their first year in the US, does this mean that they need to use that date to calculate the RRSP book value and cannot use the book value on the date of arrival?

I'm asking for two reasons:
1- If someone has reshuffled their RRSP prior to moving in the US but on the first year, it would change the book value

2- If someone has made a contribution to the RRSP in the first year, then they will end up paying US taxes on it upon withdrawal.

From what I understand, someone can either file a 1040 for full year or file as dual resident (in which case they cannot have a deduction on the Canadian income earned in the first part of the year).

Thanks in advance

[nelsona]

Yes, you needed to reshuffle before jan 01 of the year you moved.

2 is wrong. Whether one contributes to RRSP befor or after move, it is added it is still part of the non-taxable amount.

The actual amount of non-taxable is:
Book value on the day one becomes taxable PLUS any non-deductible (by IRS) RRSP contributions made after that date.

It has always been so.

So a contribution made before becomeing taxable is merely part of the book value. A contribution made after the tax date is added to the book value.

Get that notion out of your head that non-deductible RRSP contributions made after are somehow taxed in US -- they are not.

[jewel]

OK, got it. Really good news about the first uear contribution being part of the book value. Too bad for the step-up cost basis, but better to know it than to make a tax reporting mistake.
Best

[nelsona]

If the step up is really big, don;t forget that you cpould always file dual status and push your residency date to the day you fist came to US, instead of full year.