• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

Alberta tax question - RRSP's - now living in Texas

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

kimberlywrites

Senior Member
What is the name of your state? TX

Hi,
I am a permanent resident of the US, living in Texas. I am originally from Canada.
Earlier this year I cashed in some Canadian RRSP's (retirment savings). Canadian government withheld their portion of federal taxes. Alberta government didn't keep anything.
I have not had to file a Canadian tax return since being in the US, but I imagine I will have to for 2007 due to this withdrawal? Will the Alberta government be looking for their portion? What percentage?
 


Zigner

Senior Member, Non-Attorney
US Law Only - WHEN POSTING A QUESTION, YOU MUST INCLUDE THE NAME OF YOUR STATE
 

abezon

Senior Member
Canada withholds 25% from lump sum RSP payments. Assuming the bank withheld the correct amount, you do not need to file a Canadian return in 2007.

For the US, you report the gross RSP distribution, but only pay taxes on the taxable amount. The taxable amount is the difference between your basis & your distribution. Your basis is the fair market value of the RSP when you became a US resident (+ any RSP investment income you added to your return each year). This would be either the date your got your green card or the date you met the substantial presence test. See 1040NR instructions for help.

Be sure to use the various exchange rates in effect when you became a resident for the basis, & when you cashed out the RSP for your gross distribution. You'll need to dig out your RSP statements to get the basis numbers.

You'll claim a foreign tax credit for the taxes paid to Canada. Your US FTC will be significantly lower than the actual tax paid Canada.

Clear as mud?
 

LdiJ

Senior Member
That's because this is a US Law forum, eh
However, you will notice above that the OP did get an accurate answer, which included US tax information, which the OP probably did not realize that they needed.

We are not stickler's on this particular forum (the tax forum) regarding the "us law only" issue, because sometimes we can still help, as Abezon did above.
 

kimberlywrites

Senior Member
yeah, the answer being that I do not need to file a Canadian tax return but have to include it on my US return.
Eh? hardee hah hah. I never say that.
 

Zigner

Senior Member, Non-Attorney
However, you will notice above that the OP did get an accurate answer, which included US tax information, which the OP probably did not realize that they needed.

We are not stickler's on this particular forum (the tax forum) regarding the "us law only" issue, because sometimes we can still help, as Abezon did above.
Absolutely - which is the great thing about this forum :)
 

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top