Book Value and RRSPS

path · Post by **path** » Tue May 01, 2012 1:38 am

The 'book value' of my rrsp on the day I entered the US is deemed "tax free" in the eyes of the IRS.
Are there any rules as to when I have to claim the "tax free" portions - when drawing down my RRSPs?

IE
Do I 'have to' claim them right away on my first withdrawal - until they are all used up?
OR
Can I defer them - and maybe leverage these tax free withdraw to my advantage

If I can defer them - are there any reasons that I might want to hold on to them
OR
Does it just make better sense to use them up right away?

I am looking for strategies on how best to unwind my RRSPs.

thanks

nelsona · Post by **nelsona** » Tue May 01, 2012 7:28 am

You need to be consistent, remember ing that you will have Cdn tax at all times.

The best way is to either use the taxable portion first, or to use the 'blended' method (prorate your income between the tatxable and non-taxable portion) on each withdrawl,
It is rarely best to use the non-taxable portion first, but you certainly can.

nelsona · Post by **nelsona** » Tue May 01, 2012 9:52 am

The only time I could see it being useful to use the "non-taxable" first approach, is if you use 217 election and the result is that pay no Cdn tax on your RRSP withdrawals.

But once you choose the non-taxable portion first, you are committed to doing it until it is all used up.