# RRSP Withdraw



## deannw

when filing my US Taxes i am unclear. Are withdraws made from a canadian spousal rrspwhich i am named as the annuitant of to be included as income and covered by the FEIE or is there some other form i have to fill out to declare these? and how do i make sure no taxes are owing from them. I assume the money was earned income which i bought the rrsp with so should be covered by the FEIE . Any thoughts would be helpful.

thanks


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## Madonna

I, too, would be interested in knowing how to declare RRSP withdrawals, but by the owner of the RRSP. How is it declared as income along with the Canadian tax paid on the funds withdrawn and on what forms?


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## Bevdeforges

I'm not familiar with the RRSP in Canada nor how its supposed to work. But Publication 17 has a chapter on Retirement funds and how to report them. The IRS also has a publication (575) on Pension Funds and Annuities. Publications by number are available here: Publications and Notices (PDF)

The issue, I suppose, is whether or not the IRS recognizes RRSPs as retirement funds, tax-deferred funds or as regular old investments and/or annuities. 

There is further information on tax treaties here: Tax Treaties and you may want to take a look at some of the sources cited in the IRS information pamphlet for US taxpayers living abroad: http://www.irs.gov/pub/irs-pdf/p4732.pdf
Cheers,
Bev


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## Bevdeforges

One further thought on the RRSP situation. If you've been filing US tax returns all along, you should be able to treat amounts in the RRSP as "capital" to the extent that you've already declared them on prior tax returns. This would apply for any salary income that you've put into the RRSP (which you probably didn't pay tax on, thanks to the FEIE), and then to any and all income (interest or capital gains) in the account that you've declared on prior US tax returns (which you may have had to pay taxes on).

Let's assume for the sake of argument that you've declared everything - your initial deposits and all earnings on the account over time. In that case, taking money out of the RRSP is like taking cash out of your regular bank account. The income involved has already been declared and thus you don't have to declare it again (at least not to the US).

If you haven't been declaring the earnings on the account, you want to look at the rules for apportioning your withdrawal into the part you've already "paid tax" on (i.e. your contribution from salary already declared to the US) and the interest or other earnings. Depending on how much we're talking about, it might fly with the IRS as a "good faith" effort to properly declare a withdrawal. 
Cheers,
Bev


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## Madonna

Bevdeforges said:


> One further thought on the RRSP situation. If you've been filing US tax returns all along, you should be able to treat amounts in the RRSP as "capital" to the extent that you've already declared them on prior tax returns. This would apply for any salary income that you've put into the RRSP (which you probably didn't pay tax on, thanks to the FEIE), and then to any and all income (interest or capital gains) in the account that you've declared on prior US tax returns (which you may have had to pay taxes on).
> 
> Let's assume for the sake of argument that you've declared everything - your initial deposits and all earnings on the account over time. In that case, taking money out of the RRSP is like taking cash out of your regular bank account. The income involved has already been declared and thus you don't have to declare it again (at least not to the US).
> 
> If you haven't been declaring the earnings on the account, you want to look at the rules for apportioning your withdrawal into the part you've already "paid tax" on (i.e. your contribution from salary already declared to the US) and the interest or other earnings. Depending on how much we're talking about, it might fly with the IRS as a "good faith" effort to properly declare a withdrawal.
> Cheers,
> Bev


Thanks, Bev!! Very helpful.


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## Peg

The US has different wording than Canada. In a different thread, KalC said: "in Canada beneficiary refers to after your death. As far as thr IRS are concerned , beneficiary means owner of the account. Two different meanings of the same word."

In Canada, a spousal RRSP has the contributor (the one who gets the tax deduction) and the annuitant (the one who gets the money). In many cases, the contributor is also the beneficiary. However as KalC noted - US IRS beneficiary = Canadian Spousal RRSP annuitant. My husband contributed money into a spousal RRSP in my name. I filed a 8891 to claim tax deferral and I also included it on my FBAR. In my opinion, if my husband was to file with the US he would not include it on his forms since he no longer "owns" the money.

Mach7 said: "In fact, if you read a lot of tax blogs, they state that when filling out the 8891 form MAKE SURE YOU CHECK OFF THE BENEFICIARY box and not the ANNUTITANT box in order to qualify for the RRSP deferral election."

See http://www.expatforum.com/expats/expat-tax/97413-declare-rrsp.html


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## Peg

deannw said:


> when filing my US Taxes i am unclear. Are withdraws made from a canadian spousal rrspwhich i am named as the annuitant of to be included as income and covered by the FEIE or is there some other form i have to fill out to declare these? and how do i make sure no taxes are owing from them. I assume the money was earned income which i bought the rrsp with so should be covered by the FEIE . Any thoughts would be helpful.
> 
> thanks


It would not be covered by the FEIE. I had RRSP withdrawals a couple of years and the Foreign Tax Credit for Canadian taxes paid offset the US taxes.

However, there is also a 3 year attribution rule whereby the Spousal RRSP withdrawal may be taxable for the contributor. See: Spousal RRSPs: A Key RSP Strategy - TD Canada Trust To me, if Canada requires you to claim the RRSP income on your tax return then you claim it on your US tax return.


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