My_question_is: Applicable to both US and Canada Subject: RRSP Taxation in US Expert: taxman at centa.com Date: Tuesday June 27, 2006 Time: 12:36 PM -0700 QUESTION: Moved to the US in 96 and have been there ever since. Spouse and I became green card holders in 2004, after a lengthy process. When we moved to the US, we had our respective RRSP's valued @ 20k and 12.5k. We elected to defer undistributed gains throughout the years (all capital gains based on fund and stock price fluctuation), but in essence, we just let the funds sit in mutual funds and stocks. No additional funds added, none distributed. Well, as a result of the market, now the RRSP's are valued @ 5k and 15k respectively, and I have been thinking about cashing mine (5k) out since it is getting hit by low balance fees, which will eventually wipe it out over the next few decades. I know Canada takes 25% for tax, what is unclear to me is what the US would take, or more correctly, what I am to declare as taxable? In my case 5K balance is a 15k loss from what I originaly had back in 96 when I moved. As for my spouse, she has a 2.5k gain since 96, not taking into account the 25% Canadian tax. What guidance can you provide on how to calculate what we should report if we decide to cash out our respective RRSP's?? I know I will need to fill out form 8891. Many Thanks, Help Needed in Texas --------------------------------------------------------------- david ingram replies: You have a $15,000 capital loss to report after completing the form 8891. You will pay Canada 25% on the withdrawal and nothing to the US and get $5,000 or so back over the years by deducting $3,000 a year if you do not have a capital gain to use it against. Your spouse has a $2,500 gain to report which may be a capital gain or interest or dividends (or a combination) depending upon what you have reported on the form 8891 or its equivalent over the years. =================================== David Ingram's US / Canada Services US / Canada / Mexico tax, Immigration and working Visa Specialists US / Canada Real Estate Specialists My Home office is at: 4466 Prospect Road North Vancouver, BC, CANADA, V7N 3L7 Cell (604) 657-8451 - (604) 980-0321 Fax (604) 980-0325 Calls welcomed from 10 AM to 10 PM 7 days a week Vancouver (LA) time - (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. 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