RRSPs and exit tax form 8854
Moderator: Mark T Serbinski CA CPA
Primo As promised....some additional questions.
My situation is such that i was born in the united states, moved to Canada as an infant with my parents and therefore became a 'landed immigrant'. I applied for and received my Canadian Permanent resident card when the big 'push' do so occured.
Recently received my Canadian citizenship
never resided or ever worked in the united states.
Have never received US source income and have never owe'd any tax to the US.
I am probably going back over some already covered ground...however more for my piece of mind....and by referencing the above information, here is what i have tabulated.
On Part IV line 1 i have entered all "0"s for all 5 years before expatriation.
line 2 my networth (below 2 mil)
line 3 NO
line 4 NO
line 5 NO
line 6 YES
Section B, i have satisfied the first bullet point so will not complete section B as per form instructions
Section C...a bit confusing but I think my understanding is to 'skip' as i am not requesting any deferal of tax...however do we not request this when we file the 8891 form for RRSP?
Regardless...i am putting full amount of RRSP on Part V...so I suppose it is a mute point.
Part V..i am assuming we use the exchange rate on the day of relinquishment?
Assets;
I have tabulated my chq and savings account totals on column (a)
line 7 my company Defined Benefit plan (the total will reflect the toltal amount i would get if I retired on the day of relinquishment, taking a lump sum payout)
line 9, my RRSP (not held with the company, but with another Canadian financial institutuion of which i have filed 8891 forms for the past 7 years of filing).
line 16, I have tabulated the assessed value of my home as per the regional municipalities assessment for property tax purposes. it is about 20k less than i paid for the house, but nonetheless have placed this amount on line 16.
I am not sure what other assets they require...i have an old year 2000 rusted out nissan sentra....do they want the blue book value on that as well? and if so what line would it go on?
Finally, i left columns (b) (c) and (d) blank.
Shedule B income statement is where I have stopped so far. As the way i read this is that line 1 talks about US source gross income which i did not have any of...ever...so do we skip this part as well?
Got the short end of the stick so have to go to work today...but will check back later tonight to see if you replied.
Thanks again Primo...and everyone on the forum....
very helpful and everyone takes the stress out of these forms
My situation is such that i was born in the united states, moved to Canada as an infant with my parents and therefore became a 'landed immigrant'. I applied for and received my Canadian Permanent resident card when the big 'push' do so occured.
Recently received my Canadian citizenship
never resided or ever worked in the united states.
Have never received US source income and have never owe'd any tax to the US.
I am probably going back over some already covered ground...however more for my piece of mind....and by referencing the above information, here is what i have tabulated.
On Part IV line 1 i have entered all "0"s for all 5 years before expatriation.
line 2 my networth (below 2 mil)
line 3 NO
line 4 NO
line 5 NO
line 6 YES
Section B, i have satisfied the first bullet point so will not complete section B as per form instructions
Section C...a bit confusing but I think my understanding is to 'skip' as i am not requesting any deferal of tax...however do we not request this when we file the 8891 form for RRSP?
Regardless...i am putting full amount of RRSP on Part V...so I suppose it is a mute point.
Part V..i am assuming we use the exchange rate on the day of relinquishment?
Assets;
I have tabulated my chq and savings account totals on column (a)
line 7 my company Defined Benefit plan (the total will reflect the toltal amount i would get if I retired on the day of relinquishment, taking a lump sum payout)
line 9, my RRSP (not held with the company, but with another Canadian financial institutuion of which i have filed 8891 forms for the past 7 years of filing).
line 16, I have tabulated the assessed value of my home as per the regional municipalities assessment for property tax purposes. it is about 20k less than i paid for the house, but nonetheless have placed this amount on line 16.
I am not sure what other assets they require...i have an old year 2000 rusted out nissan sentra....do they want the blue book value on that as well? and if so what line would it go on?
Finally, i left columns (b) (c) and (d) blank.
Shedule B income statement is where I have stopped so far. As the way i read this is that line 1 talks about US source gross income which i did not have any of...ever...so do we skip this part as well?
Got the short end of the stick so have to go to work today...but will check back later tonight to see if you replied.
Thanks again Primo...and everyone on the forum....
very helpful and everyone takes the stress out of these forms
Hi Taxpoor,
My situation is similar to yours except I received my Canadian citizenship decades ago. By the way, I received my CLN last week from the consulate.
I'll tell you what I put on my 8854. Keep in mind I'm not an expert by any means! I sent it in in April and haven't heard back, so hopefully it was ok.
Part IV: I answered the same as you.
Section B: did not complete
Section C: Checked off "NO" for question 11, didn't complete the rest
Part V: used the exchange rate from the day before relinquishment
Line 1
Column a, value of bank accounts converted to US, I only put one half the balance since it's a joint account.
Column b, I put the same amount,
Column c, I put zero since there is no capital gain on it.
line 9, column a, put my RRSPs converted to US,
Column b, I put zero but I think you would put the amount you contributed over the years. I only recently became compliant so figured I would play it safe and put zero
Column c, I put the amount from column a, claimed the whole amount as a capital gain. I was well below the allowed capital gain and the 2 million in assets, so didn't worry about it.
line 16, column a, I put half the value of my house (owned jointly) converted to US, based on what houses in my neighbourhood of similar type are going for.
column b, I put what I paid for the house minus the cost of legal fees, land transfer taxes and improvements we made.
column c, i put the difference of column a and b (a-b). That's the capital gain on the house since purchase.
line 20, I put the totals of columns a, b, and c
line 25. I put the total of column a, if you have a mortgage, (I don't) you would put the amount in line 22, and it would be subtracted from line 20 to give you your net worth on line 25
The amount on line 25 goes on line 2, section IV as your networth
And just so the IRS knows I looked at every item, I put zeros in all the other lines, columns a b and c.
I also have old cars and I didn't bother to add them into the net worth. They really aren't worth anything to anyone else Didn't worry about anything else I own, don't have valuable things like jewelry or art. Honestly, I'm not worried about being audited up here in Canada when I have no assets in the US. Not much the IRS can do. )
For the income statement, I have no US income so I put zeros from lines 1 to 8. On line 9, I put the income I had from my final 1040, line 22 (for me it was my interest income since my earned income was reduced to zero by the foreign earned income exclusion.
line 10 then had the total of line 9 plus line 8, so same as line 9 for me.
Signed it, dated it, attached it to my dual status return and mailed another copy to the address in Philadelphia that is in the instructions.
Finito!
My situation is similar to yours except I received my Canadian citizenship decades ago. By the way, I received my CLN last week from the consulate.
I'll tell you what I put on my 8854. Keep in mind I'm not an expert by any means! I sent it in in April and haven't heard back, so hopefully it was ok.
Part IV: I answered the same as you.
Section B: did not complete
Section C: Checked off "NO" for question 11, didn't complete the rest
Part V: used the exchange rate from the day before relinquishment
Line 1
Column a, value of bank accounts converted to US, I only put one half the balance since it's a joint account.
Column b, I put the same amount,
Column c, I put zero since there is no capital gain on it.
line 9, column a, put my RRSPs converted to US,
Column b, I put zero but I think you would put the amount you contributed over the years. I only recently became compliant so figured I would play it safe and put zero
Column c, I put the amount from column a, claimed the whole amount as a capital gain. I was well below the allowed capital gain and the 2 million in assets, so didn't worry about it.
line 16, column a, I put half the value of my house (owned jointly) converted to US, based on what houses in my neighbourhood of similar type are going for.
column b, I put what I paid for the house minus the cost of legal fees, land transfer taxes and improvements we made.
column c, i put the difference of column a and b (a-b). That's the capital gain on the house since purchase.
line 20, I put the totals of columns a, b, and c
line 25. I put the total of column a, if you have a mortgage, (I don't) you would put the amount in line 22, and it would be subtracted from line 20 to give you your net worth on line 25
The amount on line 25 goes on line 2, section IV as your networth
And just so the IRS knows I looked at every item, I put zeros in all the other lines, columns a b and c.
I also have old cars and I didn't bother to add them into the net worth. They really aren't worth anything to anyone else Didn't worry about anything else I own, don't have valuable things like jewelry or art. Honestly, I'm not worried about being audited up here in Canada when I have no assets in the US. Not much the IRS can do. )
For the income statement, I have no US income so I put zeros from lines 1 to 8. On line 9, I put the income I had from my final 1040, line 22 (for me it was my interest income since my earned income was reduced to zero by the foreign earned income exclusion.
line 10 then had the total of line 9 plus line 8, so same as line 9 for me.
Signed it, dated it, attached it to my dual status return and mailed another copy to the address in Philadelphia that is in the instructions.
Finito!
Just got home from work to read you reply.
Thank You Primo! i appreciate the input in helping me through this form. I might have some additional questions, but for now it seems that you have filled it out correctly as the absence of any other objections to other posters, so I will follow your footsteps on this one.
Thanks again!
Thank You Primo! i appreciate the input in helping me through this form. I might have some additional questions, but for now it seems that you have filled it out correctly as the absence of any other objections to other posters, so I will follow your footsteps on this one.
Thanks again!
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