us citizen resident in canada

jalways747 · Post by **jalways747** » Mon Jan 21, 2013 3:22 pm

how does the cra treat rollover and roth ira for us citizen resident in canada. currently not taking distribution ?
thanks

nelsona · Post by **nelsona** » Mon Jan 21, 2013 11:27 pm

I have addressed this. Please search forum.

A rollerover from an IRA or 401(k) to a Roth should NOT be done while Cdn resident.

jalways747 · Post by **jalways747** » Tue Jan 29, 2013 11:34 am

thanks, found the info on roth !!
but how about treatment of rollover ira ?

nelsona · Post by **nelsona** » Tue Jan 29, 2013 12:05 pm

It is an IRA. Plain and simple. fully taxable in both countries, credit given on Cdn return for US taxes incurred on withdrawal -- including any early withdrawal penalty.

jalways747 · Post by **jalways747** » Fri Feb 01, 2013 11:54 am

Thanks
Understand distribution are taxable for Ira but not Roth
Do we need to report the Ira to cra like the Roth ?

nelsona · Post by **nelsona** » Fri Feb 01, 2013 12:43 pm

No. No reprting required., not even included in the foreign asset reporting form T1135

nelsona · Post by **nelsona** » Fri Feb 01, 2013 1:03 pm

Just while we are on the subject, while IRA/401(k) do not require any special reporting, Roth and Roth401(k) need BOTH the Roth reporting and are to be included as a "specifed foreign property for T1135 purposes.

jalways747 · Post by **jalways747** » Sat Feb 02, 2013 11:39 pm

Thanks. Is it true that there is no requirement to file t 1135 in the first year of taking residency in Canada
,

nelsona · Post by **nelsona** » Sun Feb 03, 2013 10:32 am

No. You must file T1135, reporting whatever you had durinhg the period you were Cdn resident.

jalways747 · Post by **jalways747** » Sun Feb 03, 2013 11:27 am

perhaps you have seen this

If you have filed a valid Election as described in this Income Tax Technical News and you have not made a Canadian Contribution to the Roth IRA, you are not required to file the foreign reporting information returns T1135, T1141 or T1134-B in respect of the Roth IRA.

nelsona · Post by **nelsona** » Mon Feb 04, 2013 6:45 am

Thanks for the info. Once you have filed the election, you can treat the Roth as an IRA for reporting purposes.

lanman2000 · Post by **lanman2000** » Thu Jul 25, 2013 4:04 pm

[quote="nelsona"]No. No reprting required., not even included in the foreign asset reporting form T1135[/quote]

I fully agree with you nelsona. We don't need to do any special reporting of a traditional IRA to the CRA. I wonder if we do however have to file something to keep the tax deferred status of the income generated each year within it though? Sunlife seems to think so...

"Continuing tax deferral is not automatic. Canadian plan owners must file an election each year with their Canadian tax returns to defer tax on their IRA and 401(k) plan balances."

(Ref: http://www.sunlife.ca/advisor/v/index.j ... le=en_CA#2 )

nelsona · Post by **nelsona** » Thu Jul 25, 2013 4:42 pm

They are -- simply put -- incorrect. Roth require statement, IRA/401(k), etc do not.

nelsona · Post by **nelsona** » Thu Jul 25, 2013 4:45 pm

Another error in their document.

On the issue moving IRA to an RRSP they saY:
"If, after considering the withdrawal, the plan owner expects that they cannot accomplish the entire transfer in one year, IRA or 401(k) plan withdrawals may be spread over as many years as needed to complete the transfer. Use of a foreign tax credit may not be spread over more than one year."

CRA has explicitly staed that this move CANNOT be for periodic withdrawals from an IRA, it MUST be one lump sum.

All in all, not a great piece of work by SunLife.

lanman2000 · Post by **lanman2000** » Thu Jul 25, 2013 6:02 pm

This stuff can be so complicated so I'm not surprised they have errors.