Discussion:Canadian Reetirement W/D
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| Revision as of 15:07, 30 September 2006 MyrnaJ (Talk | contribs) (Canadian RRSP comments) ← Previous diff |
Current revision Lois (Talk | contribs) (It is an RRSP.) |
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| {{ForumReplyPost|UserID=MyrnaJ|Date=30 September 2006|Text=Is this an RRSP (registered retirement savings plan) OR a registered retirement plan (RRP - eg a company pension) | {{ForumReplyPost|UserID=MyrnaJ|Date=30 September 2006|Text=Is this an RRSP (registered retirement savings plan) OR a registered retirement plan (RRP - eg a company pension) | ||
| If RRSP, have they been filing deferral elections with their US return? Can they track their basis and income components from the $61K? Have they wound up the account? Depending on the answers you might want to take a credit or a deduction for the foreign tax. US considers an RRSP to be an investment account, not a retirement vehicle. The US-Canada Tax Treaty provides deferral of tax on the income until withdrawal. Canada taxes 100% of the withdrawal because there is no tax on the contribution or income accruing. Since 10% tax was withheld (not 25%) I wonder (a)if it is a company pension or (b) if the financial institution believes them to be resident in Canada. If they are resident in Canada, have you seen their 2005 Canadian return?}} | If RRSP, have they been filing deferral elections with their US return? Can they track their basis and income components from the $61K? Have they wound up the account? Depending on the answers you might want to take a credit or a deduction for the foreign tax. US considers an RRSP to be an investment account, not a retirement vehicle. The US-Canada Tax Treaty provides deferral of tax on the income until withdrawal. Canada taxes 100% of the withdrawal because there is no tax on the contribution or income accruing. Since 10% tax was withheld (not 25%) I wonder (a)if it is a company pension or (b) if the financial institution believes them to be resident in Canada. If they are resident in Canada, have you seen their 2005 Canadian return?}} | ||
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| + | {{ForumReplyPost|UserID=Lois|Date=1 October 2006|Text=It is an RRSP. The withdrew the entire amount and have used the money. No they have not been filing deferral elections with their US returns - should they have and what would that have incuded? I'm not sure they know their basis but I am asking. On the US return then this would be a Sch D tranaction with the gross prceeds being 61K minus their basis. Box 30 Income tax deductions is 10%. Is that US tax or Canadian? | ||
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| + | Thanks for your help!}} | ||
Current revision
Discussion Forum Index --> Tax Questions --> Canadian Reetirement W/D
| 28 September 2006 | |
| My couple are US citizens and Canadian. They worked 100% in the US in 2005. They did withdraw from their Canadian Retirement funds of $61,111.11 and tax of $6,111.11 was withheld. My first question is this income for US purposes also on their 1040? If so would thie be foreign tax credit deduction?
I've never had anyone from Canada and this is thier only piece. They lived in the US the entire year of 2005. | |
| 30 September 2006 | |
| Is this an RRSP (registered retirement savings plan) OR a registered retirement plan (RRP - eg a company pension)
If RRSP, have they been filing deferral elections with their US return? Can they track their basis and income components from the $61K? Have they wound up the account? Depending on the answers you might want to take a credit or a deduction for the foreign tax. US considers an RRSP to be an investment account, not a retirement vehicle. The US-Canada Tax Treaty provides deferral of tax on the income until withdrawal. Canada taxes 100% of the withdrawal because there is no tax on the contribution or income accruing. Since 10% tax was withheld (not 25%) I wonder (a)if it is a company pension or (b) if the financial institution believes them to be resident in Canada. If they are resident in Canada, have you seen their 2005 Canadian return? | |
| 1 October 2006 | |
| It is an RRSP. The withdrew the entire amount and have used the money. No they have not been filing deferral elections with their US returns - should they have and what would that have incuded? I'm not sure they know their basis but I am asking. On the US return then this would be a Sch D tranaction with the gross prceeds being 61K minus their basis. Box 30 Income tax deductions is 10%. Is that US tax or Canadian?
Thanks for your help! | |
