QUESTION: I cashed out my RRSP's in 2004 and I am now living in TX (dual citizenship). I have heard something about taking a foreign tax credit. I took a total of about $7k cdn out over 2 different days and only paid the 10% withholding tax both times. How do I claim this and pay taxes in the US and not in Canada? I believe this would save me more money doing it this way. --- david ingram replies: Your financial institution made an error. When you are a non-resident of Canada, the minimum withholding on an RRSP withdrawal is 25%. If you have no or little income, you can elect to file a Canadian return with your world income included and the rate may end up less than 10%, even zero, if you have no income. However, as a non-resident of Canada the withholding tax is supposed to be 25%. So at the moment you owe Canada another 15% in withholding. However, if you have 20,000 US income already, the tax would be more than 25% on the RRSP if taxd on top of other world income. For the US, the taxable portion value of the RRSP for 2004 is the differnce in value between Dec 31, 2003 and the day you cashed it in. You can claim a foreign tax credit on form 1116 for whatever amount turns out ot be taxable. Glad to look after it for you when you need the returns prepared. If you want to call and talk, 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, Fred Snyder of Dundee Wealth Management and I, David Ingram 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 <http://www.600am.com/> Local calls are taken at (604) 280-0600 and Long Distance calls are taken at 1( 866) 778-0600 ========================================= 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/> . 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