where to report on a GIC/term deposite in Cnd

nstudent · Post by **nstudent** » Sat Jun 04, 2011 7:34 pm

It seems that I cannot find any information from previous posts,

Suppose I close a checking/GIC/term deposit in Canada & have reported all the interest incomes. Since the CND dollar has appreciated the GIC account has grown relative to the US $. Do I need to report the growth in the GIC account due to the CND dollar appreciation? If yes, where should I report it?

tsanaha · Post by **tsanaha** » Sat Jun 04, 2011 7:52 pm

if so, it would be capital gain... then what is your base ? did you buy CND and if so when ?

nstudent · Post by **nstudent** » Sat Jun 04, 2011 9:13 pm

I opened the money and deposited the account in 1996 (don't remember clearly after so many years).

tsanaha · Post by **tsanaha** » Sat Jun 04, 2011 9:24 pm

if you trade currency --- that should report as capital gain. if you had CND before becoming a US person, that should not consider trade currency.. so just report interest gain should be okay..

nstudent · Post by **nstudent** » Sat Jun 04, 2011 9:30 pm

tsanaha:

Thanks.

Another thing: do not worry about RRSP per the FAQ on IRS website. It clearly states that the FBAR penalty only applies to the accounts from which the incomes are not reported.

tsanaha · Post by **tsanaha** » Sat Jun 04, 2011 9:38 pm

RRSP without election to defer tax is considered (f8891) is considered tax noncompliant (even without one penny into my pocket)...

So the key is IF or NOT IRS will let me to back file f8891 to make an election to defer tax --- if IRS wants to get money from me -- they could just reject -- force me to amend income from RRSP --- in my view, it is grave injustice. Could that happen --- I think it is more likely...

ikeaidea · Post by **ikeaidea** » Sat Jun 04, 2011 10:44 pm

Don't be too upseted. I just got another IRS letter stated they determined no action was necessary for one of my 1040Xs. It looks like they process the 6 years 1040X seperatley but at least they accepted one year and they should have no reason to reject others.

Be patient and IRS should be reasonable for this issue.

Good luck!

tsanaha · Post by **tsanaha** » Sun Jun 05, 2011 6:11 am

ikeaidea,

thanks for sharing ... and good luck!

your case is all about RRSP, and should be okay...

mine is RRSP and non-RRSP -- so IRS may believe me "in good faith"

tsanaha · Post by **tsanaha** » Sun Jun 05, 2011 7:57 am

ikeaidea,

would you tell me which year of 1040X has been ok by IRS ? I understand that you have 6 yeras back files.

it seems a good news to you because on each of the following years (after the year of election), all f8891 (which is part of f1040x) uses the same election year. So as far as election year is concerned, you have been approved -- this is the key part of the all RRSP trouble..

nstudent · Post by **nstudent** » Sun Jun 05, 2011 9:12 am

ikeaidea:

if your case is all about RRSP, then you don't need to worry per the latest FAQ on IRS website. However, if you also have non-RRSP, than IRS acceptance of your backing filing (even just one) carries very important message.

nelsona · Post by **nelsona** » Sun Jun 05, 2011 10:20 am

A GIC is considered cash, just like any other Cdn dollars you currently have. So if you take the proceeds of a matured GIC and simply put it in a Cdn bank account, you have not triggerred a reportable gain/loss until you convert it into something else (USD, a car, stock, toothpaste, etc).

So when you BUY something else with Cdn funds, THEN you figure out what the original cost of those CDn dollars were, and report the gain or loss (if it is more than $200).

It doesn't matter if you are a trader, or where you live, or even when you move to US.

nstudent · Post by **nstudent** » Sun Jun 05, 2011 12:46 pm

nelsona:

many thanks. Which form should I use to report this?

tsanaha · Post by **tsanaha** » Sun Jun 05, 2011 1:46 pm

"So when you BUY something else with Cdn funds, THEN you figure out what the original cost of those CDn dollars were, and report the gain or loss (if it is more than $200). "

For many years I paid child support/college education in Canada (that was the reason that I left those non-RRSP fund in Canada when moving to USA)...

It seems to me that I would also have to paid tax on CND gain ? Then would I also entitle child credit on my child in Canada the same way as who live in USA.

I neve made claim on child creidt for my Canadian child, and only time I wanted to claim Educatin credit for the college cost was rejected because the child does not have a socital security number (never lived in USA)...

nstudent · Post by **nstudent** » Sun Jun 05, 2011 8:17 pm

I think a US resident can claim a child in Canada/Mexico as his/her dependent.

tsanaha · Post by **tsanaha** » Sun Jun 05, 2011 8:24 pm

Nstudent,

if the US person does not have the custody of the child, he/she pays child support only.

to claim a child credit/education credit, the US person needs to apply for a tax id number -- that is not possible without immigration paper..