Once you are moving to US, it is too late to be thinking about RRSP.
One should or should not be funding RRSP regardless of intent to move to US.
RRSP Question
Moderator: Mark T Serbinski CA CPA
Interesting discussion. I have an appointment soon with a "retirement specialist" at RBC to turn my long-ignored RRSP into a RRIF. He sounded like a seasoned veteran, but he was almost sure I had to convert my investments to GICs when converting my RRSP mutual funds to a RRIF, since non-residents can't buy stocks or mutual funds. Not quite sure, almost sure. Hmmm.
1.) Does this sound right? I'd rather keep the existing fund mix, since they're likely to do better over time than GICs.
2.) Does this "sale" of mutual funds in a RRSP to "buy" a RRIF constitute a taxable event in the U.S.? It shouldn't but I have yet to find conclusive info on that.
1.) Does this sound right? I'd rather keep the existing fund mix, since they're likely to do better over time than GICs.
2.) Does this "sale" of mutual funds in a RRSP to "buy" a RRIF constitute a taxable event in the U.S.? It shouldn't but I have yet to find conclusive info on that.
1. If you go with a broker licensed in your state (like TD waterhouse) you can invest in whatever you like, be it in RRSP or RRIF. You shoudl move your account rather than go for a chat. RBC has been doinhg you a disservice by not letting yopu invest.
2. These are taxable events in US, but you should be (and should always have been) electing to defer US taxation on your RRSP/RRIf until you wihdraw money.
2. These are taxable events in US, but you should be (and should always have been) electing to defer US taxation on your RRSP/RRIf until you wihdraw money.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
Thank you. I'll investigate TD Waterhouse before our RBC meeting. (We're in Canada now, so direct access should be easy.)
On 2.) I was concerned that the IRS would deem a transfer to a RRIF would be considered 100% cash-in, which apparently it's not. Just taxable when withdrawn each year. We've been filing TD-90.22.1 and 8891 "forever".
On 2.) I was concerned that the IRS would deem a transfer to a RRIF would be considered 100% cash-in, which apparently it's not. Just taxable when withdrawn each year. We've been filing TD-90.22.1 and 8891 "forever".
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readtheform
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- Joined: Tue Mar 09, 2010 4:42 pm
I read through this thread and I would like to clarify a couple of things. I am US citizen living in US. All my previous filings on RRSP and tax deferral are up-to-date.
This year I withdrew all money from RRSP. 25% taken by CRA. I understand I report withdrawal on 8891 and gains on 1116 and I get credit for the 25% paid to CRA.
NelsonA -- in your reply to Kvom, you said: "file a form 1116 on which you report the $66K as foreign general income".
1. Does this mean I do not have to figure out which part of my gains on RRSP are cap gains or dividend or interest, it is all reported the same?
2. I put in $10k to RRSP account when I established account and then invested monthly in mutual funds until I left Canada. When I withdrew, value is $12k. If I do not care if the $2k income is cap gains, dividend, or interest, is my cost basis that $10k (converted to USD on that original day I set up the account)? Or do I need to calculate cost basis as some average price of the mutual funds every day that I purchased them?
Thank you!
This year I withdrew all money from RRSP. 25% taken by CRA. I understand I report withdrawal on 8891 and gains on 1116 and I get credit for the 25% paid to CRA.
NelsonA -- in your reply to Kvom, you said: "file a form 1116 on which you report the $66K as foreign general income".
1. Does this mean I do not have to figure out which part of my gains on RRSP are cap gains or dividend or interest, it is all reported the same?
2. I put in $10k to RRSP account when I established account and then invested monthly in mutual funds until I left Canada. When I withdrew, value is $12k. If I do not care if the $2k income is cap gains, dividend, or interest, is my cost basis that $10k (converted to USD on that original day I set up the account)? Or do I need to calculate cost basis as some average price of the mutual funds every day that I purchased them?
Thank you!
I'm obviously not going to re-read the thread; the specific ammmount that is reported on 1116 would be the taxable portion of your withdrawal, which I have described 100's of times how to calculate.
The gross withdrawl is reported on line 7a of 8891 and line 16a of 1040.
The taxable portion, which you need to calaculate, is reported on:
7b of 8891
16b of 1040
and as foreign genral income on 1116.
Once you have made an election on 8891, you never have to determine what type of income you have, it is all either taxable or non-taxable pension income reported on line 16a/b.
The gross withdrawl is reported on line 7a of 8891 and line 16a of 1040.
The taxable portion, which you need to calaculate, is reported on:
7b of 8891
16b of 1040
and as foreign genral income on 1116.
Once you have made an election on 8891, you never have to determine what type of income you have, it is all either taxable or non-taxable pension income reported on line 16a/b.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
If you have always been a US citizen, then only your contribution is tax-free in US at withdrawal time. You can figure your contribution in USD by taking ytour yearly contribution to RRSps and the yearly exchange rate.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
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readtheform
- Posts: 23
- Joined: Tue Mar 09, 2010 4:42 pm
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readtheform
- Posts: 23
- Joined: Tue Mar 09, 2010 4:42 pm