A.G. Kalman wrote:

- quote -

Yes, I assumed he hadn't been paying US tax on the earnings.
I do agree that the pension line is a better place for it
than the IRA line, and I think we're both in agreement that
it's not taxed anything like Social Security.

Phoebe

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Phoebe Roberts, EA wrote:
- quote -

I don't believe this response is correct. An RRSP is a
nonqualified pension from the perspective of the IRS. A US
resident is taxable on the annual earnings unless the
resident formally elected to defer the US tax thereby
allowing US tax treatment to mimic Canadian tax treatment at
the time of distribution. This election is an annual affair
described in RP 2002-23. Assuming that no US tax has been
paid on the annual earnings, the distribution to a US
resident is taxable to the recipient as pension income. The
Canadian taxes paid may be used to determine a foreign tax
credit.

--
Alan
http://taxtopics.net

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" The Deckerts" <deckerts[at]srt.com.delete> wrote:

- quote -

A Canadian RRSP is very similar to a US IRA. It is not
taxed anything like Social Security.

An RRSP is treated by the IRS as a foreign retirement trust,
per the US-Canada Tax Treaty. Thus, it will increase in
value tax-deferred in both countries until the funds are
withdrawn, at which point they will be taxed. (Although you
will want to note, as has been pointed out elsewhere
recently, that some states will treat RRSP income
differently.) It is taxable in both countries, however,
they will have a foreign tax credit on the US return to
somewhat avoid double taxation.

He will need to file a tax return with the CRA (Canada
Revenue Agency) showing the income -- and either pay the
additional tax or claim a refund.

Just for a starting place, the RRSP info page on the CRA
website is at
http://www.cra-arc.gc.ca/tax/individ...sp/menu-e.html.

Bryan

--
Bryan Kellar, EA
Oregon Tax Help, Inc. Portland, Oregon
www.oregontaxhelp.com
www.canadatax.org

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"The Deckerts" <deckerts[at]srt.com.delete> wrote:

- quote -

This year was also a first for me: one of my clients had
Canadian taxable income that required a Canadian return. I
ended up getting ProFile, which has a CDN$ 15 license per
return, no minimums. I think as long as you are careful to
avoid overrides, a US tax pro should be able to work your
way through it. Be sure to check out the US-Canada tax
treaty to be sure you are handling this correctly.

--
Tom Healy, CPA
Boulder, CO
Web: http://www.tomhealycpa.com

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The Deckerts wrote:

- quote -

No, it's treated like an IRA distribution for Federal
purposes. There's also a statement you attach
(http://www.canadatotwincities.com/rr...tribution.html).
No clue on Canadian filing requirements.

Phoebe

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Is anyone there familiar with Canadian Tax? My client (US
Citizen) worked for many years in Canada and now has lives
and works in US (since 2001). He has a form NR4 from Canada
that shows Income Type "Registered Retirement Savings Plan -
lump sum payment" There is gross income and withholding
shown on the form. Is this treated like Social Security,
the same way Old Age Pensions are? Should he be filing a
Canadian Tax Return? Is there a website I could research
on? Thanks in advance for your help.

Linda

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