VA Treatment of Canadian RRSP


T

tp carter

Does anyone know how Virginia views "income" earned - but
not withdrawn - within a Canadian RRSP? I'm trying to find
out if I will have to pay Virginia state tax on my RRSP
earnings even though I am years away from making any
withdrawals.

I am a U.S. resident and just heard about the requirement to
file IRS form 3520 by Aug. 15 2003. Is this a requirement
in all cases, even if I defer paying US taxes under the
Can.-US. treaty?

Thank you,

Tom Carter
 
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A

A.G. Kalman

Does anyone know how Virginia views "income" earned - but
not withdrawn - within a Canadian RRSP? I'm trying to find
out if I will have to pay Virginia state tax on my RRSP
earnings even though I am years away from making any
withdrawals.

I am a U.S. resident and just heard about the requirement to
file IRS form 3520 by Aug. 15 2003. Is this a requirement
in all cases, even if I defer paying US taxes under the
Can.-US. treaty?
VA uses your federal AGI as its starting point. There is no
mention on the Adjustment schedule for adding back RRSP
earnings that have been deferred for federal purposes.
Unless someone more familiar with VA can respond, I would
have to research VA rulings to see if one exists for
Canadian RRSPs.

Notice 2003-25 makes it clear that you have to file the form
whether you defer or not. If you defer reporting the annual
earnings by following the instructions in Rev. Proc.
2002-23, then the RRSP plan does not have to file Form
3520-A.

If you want to defer taxation on your annual earnings in the
RRSP, RP 2002-23 requires that you attach a statement to
your annual tax return that includes:

Notice you are making the election under RP 2002-23 to
invoke Article XVIII(7) of the US- Canada tax Treaty.
The name of the plan trustee and account anumber.
The balance in the plan at the beginning of the year.

Please note that the filing of Form 3520 has nothing to do
with making the election to defer taxation on annual earnings.

Alan
http://taxtopics.net
 

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