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Hello David,
I found the seminar you put on a couple of Wednesday's back with Fred Snyder to be informative and enjoyable...Now I just gotta set my alarm clock to wake up for your radio show on Sunday mornings!!
I am actually sending you this email on behalf of a friend, as she is not on your mailing list, and has only heard of your "Tax Guru-ness" through me.
She withdrew funds (approx $9.5K from her RRSP in early 2003 as she was planning on doing some educational upgrades. Unfortunately, personal issues came up, and she was unable to get into the programs she wanted to get into, so never ended up using the $$ taken from her RRSP.
No tax was withheld by the institution that she removed the money from, as it was for the Lifelong learning plan. Revenue Canada did not send her a form / T4 or anything to confirm it as a withdrawl.
Seeing as she has not had any luck getting ino the program, what happens?
1.) Should she claim this on her 2003 taxes and indicate it as income?
2) Should she just redeposit the $9.5K into her RRSP and pretend that it never happend?
3) She bought an RRSP this year in excess of the $9.5K removed, should she somehow "designate" the amount she withdrew back into her RRSP--and what what would the tax implications be of this?
4) Should she just hold onto the $$, and keep trying to get into the program, or until she gets sick of being on a waiting list, and keep using whatever RRSP she has purchased against that year's income?
Please blank out my personal info --email / name info etc- I'd appreciate that.
Cheers,
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David Ingram replies:
I will not be on tomorrow morning April 4th but will be back on April 11th.
I passed this message on to George Hatton a Chartered Accountant who works out of our CEN-TA Park Royal Office (604) 913-9133 and who also represents Cartier Partners. His reply follows. Your friend has until the end of 2004 to get into the program or pay back the money.
----- Original Message -----
From: George Hatton
To: David Ingram at home - bus at [email protected]
Sent: Saturday, April 03, 2004 5:51 PM
Subject: Re: Lifelong Learning [email protected]
The Lifelong Learning Plan has provision for cancelling the LLP withdrawal.
One of the following situations must apply:
a.. the student was not enrolled in the educational program when the withdrawal was made, and does not enrol;
b.. the LLP student leaves the program before April of the year after the withdrawal, and 75% or more of the student's tuition is refundable; or
c.. you become a non-resident after the year in which you made an LLP withdrawal.
You cannot make this cancellation payment if the withdrawal did not meet the LLP rules when you made the withdrawal.
The due date for the cancellation payment is December 31 of the year after the year you made the withdrawal. The payment can be made to any existing or new RRSP, but not to a spousal one.
When you make the cancellation payment to your RRSP, your RRSP issuer will give you a receipt. That receipt, together with the cancellation form found in the booklet Lifelong Learning Plan (LLP) [publication 4112(E)] to the address on the form, which directs it to Ottawa. The booklet can be downloaded from their website www.cra.gc.ca or is available at any Canada Revenue Agency office.
The actual download is at:
http://www.ccra-adrc.gc.ca/E/pub/tg/rc4112/rc4112-03e.pdf
As she has the balance of 2004 to become enrolled, she may wish to follow that option if she remains keen to upgrade her education. The other choices outlined are essential consequential if the cancellation or registration in an educational program does not occur before the end of the year.
George Hatton
Cartier Partners Financial Services
a Dundee Wealth Management Company
108-100 Park Royal South
West Vancouver, BC., V7T 1A2
[email protected]
Phone (604) 913-9137 Fax (604) 913-9123
Cell (604) 603-4212
I will not be on tomorrow morning April 4th, but will be back on April 11th.
Answers to this and other similar questions can be obtained free on Air every Sunday morning.
Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of Cartier Partners and I 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
More information can be obtained at www.centa.com
david Ingram of the CEN-TA REALTY Group
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
(604) 980-0321 - Fax 913-9123 [email protected]
www.centa.com www.david-ingram.com
Res (604) 980-3578 Cell 657-8451
calls taken seven days a week from 10 AM to 10 PM Vancouver (Los angeles) time.
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