Form 8891 questions here please!!!!

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liz
Posts: 12
Joined: Thu Jun 09, 2005 2:14 pm

Post by liz »

I read in this site some thing about section 72(w). When did it come to be effective? my RPP was rolled over to RRSP in January 2004 and I withdrew that RRSP in February 2004.

But I became a US resident in 2002. I don't know how much RPP gain since 2002 to 2004 for me to eatablish cost basis on the day of arrival to US. I only know the amount when I rolled over to RRSP. SO If I report the amount of the date of withdrawal as cost basis I am cheating IRS and I don't like to lie

If you know any regulation that I can refer regaring the law before section 72 W came into effect please let me know

Thanks [:)]
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

72(w) came into effect in Oct 2004, this hasbeen mentionned countless times here.

Technically, 0 of your pension money is taxable under the old rules, so you're not cheating the IRS if you include none of it as income.

You know the US$ BOOK value of your RRSP the day you moved to US, you know the US$ value of your pension the day you got it. add these 2 numbers up and subtract that from your US$ payout.

This goes on line 16b.

Fill in the apporoprate ammounts on 8891 and Then forget about all this.

Otherwise, pay $5000 to an accountant to give you theiur rationale( they won't), who will incorrectly tell you to put ALL the RRSP on 16b, pay an extra thousand in US tax, and forget about it.

But either way, get'r'dun and forget about it.



<i>nelsona non grata... and non pro</i>
pjhowe
Posts: 4
Joined: Sun Sep 11, 2005 4:49 am

Post by pjhowe »

Nelsona :

I have a normal Canadian RRSP account which I have not taken any distributions or made any contributions during the year.

I am confused about line 10 on form 8891.
Line 10 talks about "undistributed earnings" - which to me means "earnings in the plan that remained in the plan" - ie; the money I made in the plan due to growth over the year.
Yet "line 10" talks about adding the amounts to your US income line on FORM 1040 (line 8a, 9a, etc).
Someone else asked you about this and you responded :

"Line 10 is only for those who are NOT electing to defer income. This is quite clear in the instructions."

Where is it stated in the instructions that line 10 is "for those who are not electing to defer income" ?
I don't see any instructions on form 8891 (back of form does NOT have line by line instructions) that refers specifically to line 10.
Are there supplement instructions to Form 8891 ?
What am I missing here?

thanks in advance
- pat
pjhowe
Posts: 4
Joined: Sun Sep 11, 2005 4:49 am

Post by pjhowe »

Nelsona :

It was obviously late last night when I was working thru this (don't read tax forms at 1AM) - because today I am able to answer my own question

LINE 8 STATES
If you have checked
- the "Annuitant" box on line 5
- the "Yes" box on line 6a
- or the box on line 6c
stop here. Do not complete the rest of the form.

So if any or all of these conditions apply, stop at line 8.

As you stated in a previous post. This translates into :

If you are a "beneficiary", and have not made the election, and are not making the election this year, fill in lines 9 and 10, and add the income to your return. otherwise stop at 8.

thanks anyway
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

No one should be using "Annuitant" option.

It is an distinction that does not apply to Cdn registered plans.

ALWAYS use the beneficiary option, as otherwise, one will not be deferring or reporting correctly.

<i>nelsona non grata... and non pro</i>
shsamardar
Posts: 73
Joined: Mon Nov 14, 2005 1:50 am

Post by shsamardar »

Nelsona

I read form 8891

If I amke election on 6c. , it says stop on line 8
line 9 is saying about further contibutions to the plan.

does it mean, if I choose the election, I can't make any further contributions to the plan. is this correct?

my general question, is it permitted to contribute on RRSPs for US redients? if yes, do you see tax benefits if there is any candian income and there is left over not used RRSP contributions?

thanks
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

You may OF COURSE continue to fund your RRSP while living in US, regardless of any election you make on 8891, but it is generally unwise to do so from a tax point of view, since you are not reducing your overall tax burden.

Save any unused room for when you return.

<i>nelsona non grata... and non pro</i>
flames9
Posts: 50
Joined: Fri Apr 08, 2005 9:00 am

Post by flames9 »

Just a bump to get this back on top!!
flames9
Posts: 50
Joined: Fri Apr 08, 2005 9:00 am

Post by flames9 »

http://forums.serbinski.com/viewtopic.php?t=1132

Above is the more active/current 8891 info!! Apologize for bumping this one to the top!! I hang my head in shame!!
Greg
Posts: 106
Joined: Tue Nov 09, 2004 3:38 pm

Post by Greg »

Sounds right.... Just remember Line 8 is converted into USD.
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