I currently have a Canadian RRSP account that I would like to transfer to the US. I was transferred by my company to California, and at that time I had the option to move the RRSP at a withholding rate of 25%. It has been almost 5 years now, and I would like to move the money to the US and invest it. What is the process, and what are my taxation concerns in both countries. Is there a benefit to leaving it or moving it? Is there a max or minimum amount to move? Thank you. ------------------------------------------ david ingram replies: When you cash in a Canadian RRSP as a non-resident the Canadian Withholding is a flat 25%. You do not have to file a Canadian Tax return although if you were only cashing in $10,000 and had no other income that year, you could file a Section 217 Canadian return and get some of the tax back. For US purposes, you have to look at the value of the RRSP the day you left Canada. Only the gain from when you left to when you cash it, is taxable in the USA. So if you cashed in $100,000 and had $25,000 withheld and it was worth $90,000 the day you moved to the USA, your earnings would be $10,000 and the tax withheld would be $2,500. You would then report the $10,000 (converted to US dollars) on Schedule B (assuming interest or dividends) and Schedule D if it was a capital gain. The $2,500 (converted to US dollars) would be claimed as a foreign tax credit. Should you move?? What a question? If you do NOT have a use for the money, I would leave it in Canada. You said you have been gone five years. If you had taken it out of Canada in March 2000 and were looking at its worth today, you would likely have a heart attack because on average you would have lost 30% in exchange and the US market has not performed at all well in relation to Canada. My bet is that you have 50% more for having left it in Canada. >From your email address and the fact that we looked after your return last year, I know that "YOU" understand all to well what has happened to Canadian Exports to the USA because of the drop in value of the American Greenback. I am one of the people who feels that the Canadian dollar will continue to rise (to our detriment with regard to International trade) and come close to par again. But if I am wrong and the American Market takes off, you will shoot me. So play it by ear. Take half to the US and leave half in Canada. That hedges your bet. I also recommend, (if he will accept a new account) that you move your account to a fellow I have never met named Shaun Rickerby, a broker with TD Investments in Richmond. Shaun is one of about 16 people in all of Canada who has made the effort to be licenced to deal with Canadians in about 43 states. You can get hold of Shaun at shaun.rickerby at td.com his phone number is 604 482-5188 Hope this helps. I will be glad to look after your returns as you know. Answers to this and other similar questions can be obtained free on Air every Sunday morning. Every Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of Dundee Wealth Management and I, David Ingram will be hosting an INFOMERCIAL but LIVE talk show called "ITS YOUR MONEY" Those outside of the Lower Mainland will be able to listen on the internet at www.600AM.com Local calls are taken at (604) 280-0600 and Long Distance calls are taken at 1( 866) 778-0600 I do not know how far the LD line reaches. ========================================= David Ingram's US/Canada Services US / Canada / Mexico tax, Immigration and working Visa Specialists US / Canada Real Estate Specialists 4466 Prospect Road North Vancouver, BC, CANADA, V7N 3L7 Res (604) 980-3578 Cell (604) 657-8451 (604) 980-0321 Fax (604) 980-0325 Email to taxman at centa.com www.centa.com www.david-ingram.com Disclaimer: This question has been answered without detailed information or consultation and is to be regarded only as general comment. 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