RRSP Tax Calculation For CA

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

Moderator: Mark T Serbinski CA CPA

richarooca
Posts: 16
Joined: Mon Apr 14, 2008 12:30 am

Post by richarooca »

Thanks Nelson. I only had an RRSP after I became CA non-resident.
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

So the RRSP portion does not apply to you.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
piotrk
Posts: 2
Joined: Sat Mar 05, 2011 6:13 pm

Post by piotrk »

Nelson: Thanks for the great information in this thread (and others) so far, but I was wondering if I could ask for a couple extra clarifications:

1. I've been reporting the reinvested RRSP dividends as California income throughout my residency. This year I closed my RRSP, so I first report any dividends that occurred before the distribution as California income, then report the distribution amount, minus all dividends previously reported, minus the value of the RRSP at the time of becoming a resident. Correct?

2. I report the above adjusted distribution amount as capital gains on schedule D(540), and can therefore apply carryover capital losses to offset the amount?

3. This is the first year I have federal foreign income/tax credit and simultaneously the first year I'm hit by AMT. I need to elect whether to use the Simplified AMT Foreign Tax Credit Limitation. It doesn't seem to make any difference to my taxes for this year but the election is irrevocable, yet there's very little information on its impact. What should I take into consideration when making this decision?

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

Post by nelsona »

1. Not quite. For cali, you report the dividends paid within the \rrsp, and the gains/losses triggered by the sale of the RRSP investments, which may or may not have anything to do with arrival value. You sold ABC when you collapsed the RRSP, you need to determine what gain/loss you had on that sale, and so on.

2. If it is corrct gain or loss

3. Since you won't have any future need to worry about, just choose which ever one yierlds less tax, and use siomplified if it is equal.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
piotrk
Posts: 2
Joined: Sat Mar 05, 2011 6:13 pm

Post by piotrk »

Thanks, I see. How about exchange rates: do I calculate the basis and capital gains in CA$ and convert to US$ at the exchange rate on the distribution date, or do I calculate the basis in US$ separately based on the exchange rate on the date of each contribution? Or something else altogether?
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

Echange rate when you bought and excange rate when you sold: each transaction is calculated in USD in effect at the time of the buy sell, or distribution.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
Post Reply