i am currently working in US. I plan to quit working in the next few years (by age 47) as I grow our real estate investments.
I would like to access my RRSPs and LIRA in order to use these funds to invest in Real Estate.
What is the best plan to withdraw these funds and implications?
Is there an opportunity to roll it over into a directed investment that is tax sheltered?
My interest is to use these funds to buy rentals, and draw the rental income.
Plans to access RRSP and LIRA from US
Moderator: Mark T Serbinski CA CPA
Removal of any funds from an RRSP or LIRA (after you apply for unlocking), will result in 25% tax withheld by Canada.
There LIRA will also be 100% taxable in US, and the RRSP will be partially taxable in US (the growth portion since you became US taxpayer). the 25% Cdn tax would be used as a credit on your 1040. If you have state tax, the taxable portion will be taxed in your state as well. Usually, the result is about 35-40% tax on these funds between the 25% Cdn, IRS and state.
You'd proabably be better off borrowing.
There LIRA will also be 100% taxable in US, and the RRSP will be partially taxable in US (the growth portion since you became US taxpayer). the 25% Cdn tax would be used as a credit on your 1040. If you have state tax, the taxable portion will be taxed in your state as well. Usually, the result is about 35-40% tax on these funds between the 25% Cdn, IRS and state.
You'd proabably be better off borrowing.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing