RRSP reporting Schedule B - TDF 90-22.1 - 8891 forms might have to pay tax even if lost money overall -

 
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My_question_is: US-specific

question: 
Hi, David:

You did our US returns for 2006, which I used as a template for 2007. 
But I am stumped with 2008, since our RRSPs had negative yields. 
Should we be filing schedule B at all? If so, how do we reflect the negative 
interest? Also, I presume that on form 8891, line 10, we would show the 
negative difference for the year.

Your consideration and response will be much appreciated.

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david ingram replies:

Not many people showed a profit on their RRSP accounts last year

What we are doing is calculating the negative loss which is usually an unrealized  combination of exchange rates and stock price decline.  However, even the worst stock portfolio usually showed some dividends and maybe some interest and maybe some internal capital gains because the find sold some shares that 'did' show a capital gain.


Look at your statements to see if interest, dividends or capital gains were credited.  Put those amounts where they go,  on schedule 8891 if there are any.  They then go on schedule B  put them in as a positive and then put a negative with the explanation "per 8891 filed"  written beside the negative amounts.

This assumes that you are not in California.  If you are in California, be advised that California does NOT recognize form 8891 and you have to add the amounts back into your California 540 on schedule CA and pay tax on current internal earnings even if the actual fund went down $100,000

I will compare it to a rental house.  A paid for rental house renting fro $2,000 a month can show a large rental profit on a tax return even if the worth of the house went down $200,000.

Hope this helps.

Make sure you get those TDF 90-22.1 forms in -  I am told that there is now a $10,000 fine for failing to file by June 30th.

Have not seen one yet but it has been announced twice that i have seen.

david
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This is not intended to be definitive but in general I am quoting $900 to $3,000 for a dual country tax return.

$900 would be one T4 slip one W2 slip one or two interest slips and you lived in one country only (but were filing both countries) - no self employment or rentals or capital gains - you did not move into or out of the country in this year.
 
$1,200 would be the same with one rental
 
$1,300 would be the same with one business no rental
 
$1,300 would be the minimum with a move in or out of the country. These are complicated because of the back and forth foreign tax credits. - The IRS says a foreign tax credit takes 1 hour and 53 minutes.
 
$1,600 would be the minimum with a rental or two in the country you do not live in or a rental and a business and foreign tax credits  no move in or out

$1,700 would be for two people with income from two countries

$3,000 would be all of the above and you moved in and out of the country.
 
This is just a guideline for US / Canadian returns
 
We will still prepare Canadian only (lives in Canada, no US connection period) with two or three slips and no capital gains, etc. for $200.00 up. However, if you have a stack of 1099, or T3 or T4A or T5 or K1 reporting forms, expect to pay an average of $10.00 each with up to $50.00 for a K1 or T5013 or T5008 or T101 --- Income trusts with amounts in box 42 are an even larger problem and will be more expensive. - i.e. 20 information slips will be at least $350.00
 
With a Rental for $400, two or three rentals for $550 to $700 (i.e. $150 per rental) First year Rental - plus $250.
 
A Business for $400 - Rental and business likely $550 to $700
 
And an American only (lives in the US with no Canadian income or filing period) with about the same things in the same range with a little bit more if there is a state return.
 
Moving in or out of the country or part year earnings in the US will ALWAYS be $900 and up.
 
TDF 90-22.1 forms are $50 for the first and $25.00 each after that when part of a tax return.
 
8891 forms are generally $50.00 to $100.00 each.
 
18 RRSPs would be $900.00 - (maybe amalgamate a couple)
 
Capital gains *sales)  are likely $50.00 for the first and $20.00 each after that.

Catch - up returns for the US where we use the Canadian return as a guide for seven years at a time will be from $150 to $600.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc. Note that these returns tend to be informational rather than taxable.  In fact, if there are children involved, we usually get refunds of $1,000 per child per year for 3 years.  We have done several catch-ups where the client has received as much as $6,000 back for an $1,800 bill and one recently with 6 children is resulting in over $12,000 refund. 

Email and Faxed information is convenient for the sender but very time consuming and hard to keep track of when they come in multiple files.  As of May 1, 2008, we will charge or be charging a surcharge for information that comes in more than two files.  It can take us a valuable hour or more  to try and put together the file when someone sends 10 emails or 15 attachments, etc. We had one return with over 50 faxes and emails for instance. 

This is a guideline not etched in stone.  If you do your own TDF-90 forms, it is to your advantage. However, if we put them in the first year, the computer carries them forward beautifully.

--
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