Question - ROTH IRA

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nabstar
Posts: 3
Joined: Sun Apr 15, 2018 11:28 am

Question - ROTH IRA

Post by nabstar »

Hey everyone,

US Citizen living in Canada

Have a ROTH IRA. They are custodial accounts.

Per the CRA interpretation bulletin it says CRA considers custodial ROTH IRA's equivalent of bank accounts. Interest credited or accrued will, subject the application of the convention, be taxable on an annual basis. Subsequent distribution is not taxable in Canada in year received.

However the ROTH has capital gains, dividends, etc. So do I only report the accrued interest on the Cdn return?

Seems a bit odd I guess.

Thanks
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

Roths are protected by the treaty, and are not taxable at all if you follow the CRA rule for reporting the account when you moved to Canada, and DO NOT make any contributions whil in Canada.You stopped reading the CRA guide before they explain that it is not taxable by following those rules.


There are threads on this.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
nabstar
Posts: 3
Joined: Sun Apr 15, 2018 11:28 am

Post by nabstar »

Your right they didn't make any Canadian contribution. However problem is they never made the election when they came to Canada.
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

That is easily remedied. CRA will grant a pardon for failure to have known about this requirement.
How many years ago did they arrive in Canada?

btw, if they do not successfully elect, all internal income is taxable, year over year (like any other investment account). Custodial simply means that disbursements are under the control of the owner, rather than an annuity contract.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
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