US citizen living in Canada with a non-qualified annuity (purchased with after tax $). I think this must be similar to a non-registered segregated fund in Canada? In which case, I think only the growth is taxable?
I received a 1099-R slip with $5800 in box 1 (gross), $3300 in box 2a (taxable), $2500 in box 5 (employee contributions), $3300 in box 14 (state distribution) and box 7 has 7D in it.
Any one have any idea how this is taxed in Canada and the US?
Non-Qualified Annuity
Moderator: Mark T Serbinski CA CPA
In both US and Canada, this is an annuity, taxed at regular rates. The taxable portion in US (and thus Canada) is US$3300.
Canada will grant you FTC based on average tax rate your pay on $3300 of income calculated on your 1040.
Canada will grant you FTC based on average tax rate your pay on $3300 of income calculated on your 1040.
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
Thanks for the quick response, this is helps a lot :)
I read somewhere that the foreign tax credit I can claim in Canada for a US citizen is limited to 15% for pension income. Is this correct? If so, does this apply to this annuity?
Also, I have over $100K in the annuity, do you know if I have to report it on the T1135 Foreign Income Form?
I read somewhere that the foreign tax credit I can claim in Canada for a US citizen is limited to 15% for pension income. Is this correct? If so, does this apply to this annuity?
Also, I have over $100K in the annuity, do you know if I have to report it on the T1135 Foreign Income Form?
Yeah, you are probably right, effective tax rate is likely below 15%.
Ok will check out the T1135 and see what I can find out.
I have one more issue I'm not too sure about. I have a 1099-DIV with 1a ordinary div, 2a capital gain dist'n and 3 non-div dist'n. I read elsewhere on this forum and came up with this.
1a taxed at 100% in Canada and can't gross up or claim div tax credit (can claim FTC up to 15%)
2a taxed at 100% in Canada (can't claim FTC)
3 not taxable as this is similar to return of capital
Do I understand this correctly? Thanks so much for all your help.
Ok will check out the T1135 and see what I can find out.
I have one more issue I'm not too sure about. I have a 1099-DIV with 1a ordinary div, 2a capital gain dist'n and 3 non-div dist'n. I read elsewhere on this forum and came up with this.
1a taxed at 100% in Canada and can't gross up or claim div tax credit (can claim FTC up to 15%)
2a taxed at 100% in Canada (can't claim FTC)
3 not taxable as this is similar to return of capital
Do I understand this correctly? Thanks so much for all your help.