PART II As usual Andrew Nelson has come up with more information with a reference to the Deloitte site. Gary Gauvin and i will look at the situation at the end of October and send something else -Original Message----- From: Nelson, Andrew G. [mailto:agnelson at cal.ameren.com] Sent: Wednesday, October 05, 2005 8:31 AM To: taxman at centa.com Subject: RE: RRSP distributions - what is basis? Background on the change: The release that you are talking about is probably similar to the deloite one below: http://www.deloitte.com/dtt/newsletter/0,1012,sid%253D3634%2526cid%253D72550,00.html#rules The issue with regards to RRSPs, as was pointed out in the article is: Are RRSPs employer-sponsored or not? The IRS has NEVER said that RRSPs are employer sponsored, and that is why we have had these innumerable changes in policy by IRS with respect to reporting etc. They are TRUSTS in the eyes of IRS. Had they been considered employer-sponsored, we would not have had to go thru the Form 3520 fiasco a couple of years ago, as the rules on Cdn employer-sponsored plans (in the treaty) would have clearly taken effect. The IRS simply does not view RRSPs as employer-sponsored pensions, and thus the wording of the applicable section of the IRS Code does not apply to RRSPs and in the specific case of this e-mail, does not apply to US citizens in any event. ****This is the new section of IRC that is in question.**** "72(w) APPLICATION OF BASIS RULES TO NONRESIDENT ALIENS. -- 72(w)(1) IN GENERAL. --Notwithstanding any other provision of this section, for purposes of determining the portion of any distribution which is includible in gross income of a distributee who is a citizen or resident of the United States, the investment in the contract shall not include any applicable nontaxable contributions or applicable nontaxable earnings. 72(w)(2) APPLICABLE NONTAXABLE CONTRIBUTION. --For purposes of this subsection, the term "applicable nontaxable contribution" means any employer or employee contribution -- 72(w)(2)(A) which was made with respect to compensation -- 72(w)(2)(A)(i) for labor or personal services performed by an employee who, at the time the labor or services were performed, was a nonresident alien for purposes of the laws of the United States in effect at such time, and 72(w)(2)(A)(ii) which is treated as from sources without the United States, and 72(w)(2)(B) which was not subject to income tax (and would have been subject to income tax if paid as cash compensation when the services were rendered) under the laws of the United States or any foreign country." ********** AGN -----Original Message----- From: centapede-bounces+agnelson=cal.ameren.com at lists.centa.com [mailto:centapede-bounces+agnelson=cal.ameren.com at lists.centa.com] On Behalf Of centapede at lists.centa.com Sent: Wednesday, October 05, 2005 9:50 AM To: CENTAPEDE; Webmaster at Jurock. Com Subject: RRSP distributions - what is basis? - askinternational income tax expert preparation & immigrationconsultant david ingram, North Vancouver, BC,Canada experts on RRSP RESP IRA 401(K) radio CKBD 600AM 9 AM Sundaymornings on Fred Snyder's IT's Y QUESTION: My client is dual citizen, U.S./Canada. He lived and worked in Canada for 15 years and contributed to RRSP. He returned to the U.S. in 1992 and has been reporting correctly to defer the U.S. tax on the RRSP income. Does he have basis in the U.S. to the extent of his contributions plus interest, dividends and realized gains in 1992? Is the U.S. citizen returning to the U.S. treated differently from a Canadian citizen who becomes a U.S. resident with an RRSP? I have some complicated retirement issues and may need your tax prep services. Thank you in advance. ------------------------------------------- david ingram replies: Up until noon yesterday, I would have automatically said that your client has a basis for the value of the RRSP when he returned across the border for his contributions at least. But apparently there is a KPMG release which I have not seen that suggests that such is not the case because of a US change in Oct or Nov 2004. This will be the subject of a little research project that Gary Gauvin and I intend to follow up with after the Oct 15th second or third deferral deadline. I will pass this along to the list and If anyone has a definitive answer, please pass it along. 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, I, david ingram am a permanent guest on Fred Snyder of Dundee Wealth Managers' 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 <http://www.600am.com/> Call (604) 280-0600 to have your question answered. BC listeners can also call 1-866-778-0600. Callers to the show and questioners on this board can also attend the Thursday Night seminars on finance and making your Canadian Mortgage Interest deductible. David Ingram's US/Canada Services US / Canada / Mexico tax, Immigration and working Visa Specialists US / Canada Real Estate Specialists Home office at: 4466 Prospect Road North Vancouver, BC, CANADA, V7N 3L7 Cell (604) 657-8451 - (604) 980-0321 Fax (604) 980-0325 Calls welcomed from 9 AM to 9 PM 7 days a week (please do not fax or phone outside of those hours as this is a home office) email to taxman at centa.com <mailto:taxman at centa.com> www.centa.com <http://www.centa.com/> www.david-ingram.com <http://www.david-ingram.com/> Disclaimer: This question has been answered without detailed information or consultation and is to be regarded only as general comment. Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist in connection with personal or business affairs such as at www.centa.com <http://www.centa.com> . If you forward this message, this disclaimer must be included." Be ALERT, the world needs more "lerts" This from "ask an income tax and immigration expert" from www.centa.com <http://www.centa.com/> or www.jurock.com <http://www.jurock.com/> or www.featureweb.com <http://www.featureweb.com/> . David Ingram deals on a daily basis with expatriate tax returns with: multi jurisdictional cross and trans border expatriate problems for the United States, Canada, Mexico, Great Britain, the United Kingdom, Kuwait, Dubai, Saudi Arabia, Thailand, Indonesia, Japan, China, New Zealand, France, Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, Iran, India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, US, UK, GB, and any of the 43 states with state tax returns, etc. Rockwall, Dallas, San Antonio and Houston Texas Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax and Immigration Tips, Income Tax and Immigration Wizard Income Tax and Immigration Guru Income Tax and Immigration Consultant Income Tax and Immigration Specialist Section 216(4) 216(1) NR6 NR-6 NR 6 Non-Resident Real Estate tax specialist expert preparer consultant expatriate anti money laundering money seasoning FINTRAC E677 E667 105 106 TDF-90 Reporting $10,000 cross border transactions Alaska, Alabama, Arkansas, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Garland, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon. Pennsylvania, Rhode Island, Rockwall, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, West Virginia, Wisconsin, Wyoming, British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec City, New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland, Yukon and Northwest and Nunavit Territories, Mount Vernon, Eumenclaw, Coos Bay and Dallas Houston Rockwall Garland Texas Taxman and Tax Guru and wizzard wizard - consultant - expert - advisor -advisors consultants - gurus - Paris Prague Moscow Berlin Lima Rio de Janeiro, Santaigo New York, Boston, Sacramento, Minneapolis, Salem, Wheeling, Philadelphia, Pittsburgh, Atlanta, Pensacola, Miami, St Petersburg, Naples, Fort Myers, Cape Coral, Orlando, Atlanta, Arlington, Washington, Hudson, Green Bay, Minot, Portland, Seattle, St John, St John's, Fredericton, Quebec, Moncton, Truro, Atlanta, Charleston, San Francisco, Los Angeles, San Diego, Sacramento, Taos, Grand Canyon, Reno, Las Vegas, Phoenix, Sun City, Tulsa, Monteray, Carmel, Morgantown, Bemidji, Sandpointe, Pocatello, Bellingham, Custer, Grand Forks, Lead, Rapid City, Mitchell, Kansas City, Lawrence, Houston, Albany, Framingham, Cambridge, London, Paris, Prince George, Prince Rupert, Whitehorse, Anchorage, Fairbanks, Frankfurt, The Hague, Lisbon, Madrid, Atlanta, Myrtle Beach, Key West, Cape Coral, Fort Meyers, Berlin, Warsaw, Auckland, Wellington, Honolulu, Maui, Kuwait, Molokai, Beijing, Shanghai, Tokyo, Manilla, Kent, Winnipeg, Saskatoon, Regina, Red Deer, Olds, Medicine Hat, Lethbridge, Moose Jaw, Brandon, Portage La Prairie, Davidson, Craik, Edmonton, Calgary, Victoria, Vancouver, Burnaby, Surrey, Edinburgh, Dublin, Belfast, Glasgow, Copenhagen, Oslo, Munich, Sydney, Nanaimo, Brisbane, Melbourne, Darwin, Perth, Athens, Rome, Berne, Zurich, Kyoto, Nanking, Rio De Janeiro, Brasilia, Colombo, Buenos Aries, Squamish, Churchill, Lima, Santiago, Abbotsford, Cologne, Yorkshire, Hope, Penticton, Kelowna, Vernon, Fort MacLeod, Deer Lodge, Springfield, St Louis, Centralia, Bradford, Stratford on Avon, Niagara Falls, Atlin, Fort Nelson, Fort St James, Red Deer, Drumheller, Fortune, Red Bank, Marystown, Cape Spears, Truro, Charlottetown, Summerside, Niagara Falls, Albany STAR WARS ask international income tax expert preparation & immigration consultant david ingram, North Vancouver, BC, Canada experts on RRSP RESP IRA 401(K) radio CKBD 600AM 9 AM Sunday mornings on Fred Snyder's IT's YOUR MONEY ----------------------------------------------------------------- List-Unsubscribe: http://lists.centa.com/mailman/listinfo/centapede mailto:centapede-request at lists.centa.com?subject=unsubscribe ******************************* The information contained in this message may be privileged and/or confidential and protected from disclosure. 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CEN-TA Cross Border Services - Tax, Visas, Immigration
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