My_question_is: Applicable to both US and Canada
Subject: Rollover Canadian pension lump sum into IRA
Expert: taxman at centa.com
Date: Wednesday September 14, 2005
Time: 02:42 PM -0700
QUESTION:
Hi David,
I am a US Citizen residing in Arizona, and my wife is in the US on a K-3
visa awaiting her Green Card.
My Canadian spouse recently terminated her employment in Canada and must
choose how to handle her pension. The options are deferred pension payable
from normal retirement date or lump sum present value transferable to a
prescribed vehicle (i.e. RRSP, a Life Income Fund etc).
Is it possible to transfer the lump sum to an IRA and if so, are there any
rules or regulations we should be aware of?
Thanks for providing such a valuable service!
=========================================
david ingram replies:
There is no method that I have heard of to transfer (directly or indirectly)
a Canadian Pension, RRSP or annuity to an equivalent tax deferred account in
the USA.
It is possible to effectively make the transfer in reverse but still not
directly.
I recommend that she deal with a knowledgeable person in Canada and look at
a LIF.
If she is still in Canada in Ontario or British Columbia, she could deal
with Fred Snyder at (604) 731-8900. However, if she has already left
Canada as a resident, Neither Fred or 99% of other Canadian Registered
representatives can start a new RRSP account for a non-resident of Canada.
Therefore, if she is already residing in the US, it will be very difficult
for her to find anyone who wants to or indeed is "ABLE" to deal with her
account.
This last rule is very serious and even applies to someone who works in
Canada on a daily basis but commutes to a home in the US as happens so often
between Windsor and Detroit or Bellingham and Vancouver (for example).
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