Canada Home Buyers Plan & RRSP Withdrawal to IRS? - Expert Income Tax help on cross Border tax and immigration and divorce a
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My_question_is: Both question: Dear Tax Expert I would really appreciate your advice. I am Canadian living in the US. In 2005 I withdrew some funds tax free from my RRSP to purchase a rental home under the home buyers plan. I moved to the US in 2009 and that same year sold the house. As a deemed non-resident in 2009, the CRA had me declare the 2005 RRSP funds as income in 2009 (had to pay all taxes on that since I left Canada). My question is: - Do I also have to declare the 2005 RRSP withdrawal as 2009 income to the IRS using form 8891? This doesn't make sense to me since there wasn't an actual distribution in 2009 (as per the RRSP statement) and I can't put a number in line 7a in form 8891 Thanks a lot!!
david ingram replies
The first error was that a HBP can NOT be used to buy a rental house - It has to be used to buy a house that you lived in so properly, the RRSP withdrawal was taxable in 2005.
You do not have to report the Withdrawal on form 8891 because you made the withdrawal BEFORE moving to the US and presumably declared it on the departing Canada Tax from along with Forms T1161 and maybe 1243 and 1244..
However, if you still have any balance in an RRSP in Canada, you have to be sure to report them on form 8891 and if the total exceeds $10,000 fill in forms TDF 90-22,.1 as well
And, of course, an other Canadian or German or Australian, etc accounts must be reported as well.
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Please also note that we prepare Canadian, US, Australian, UK and New Zealand returns on a mail in, email, fax, snail mail or couriered basis. At any time, our clients are in 40 countries or more. They have every occupation from nuclear Submarine captains to FedEx pilots to Major Bank officers to Politicians, Diplomats and border patrol officers. My favourite, however, is a penguin catcher in Antarctica among others there..
If you 'really' only have a single question requiring a 'couple' of minutes, you can try phoning me for free as part of the following.
- For a quick free question
You might try calling Fred Snyder's radio program for an answer on a Sunday Morning..
Fred Snyder's "IT'S YOUR MONEY" radio show. on CISL, 650 AM on the dial in Vancouver from 9 to 11:00 AM every Sunday (604) 280-0650 or (877) 280-0650 - You can listen live from anywhere in the world at www.am650radio.com from anywhere in the world. click on the button in the top left hand corner.-
- You might try calling Fred Snyder's weekly radio programs for an answer.
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Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office) expert US Canada Canadian American Mexican Income Tax service help.
pert US Canada Canadian American Mexican Income Tax service and help.
David Ingram gives expert income tax service & immigration help to non-resident Americans & Canadians from New York to California to Mexico family, estate, income trust trusts Cross border, dual citizen - out of country investments are all handled with competence & authority.
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