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Tax Question for American citizen with an RRSP
Old 10-11-2017, 09:12 PM   #1
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Tax Question for American citizen with an RRSP


I was hoping someone might be able to asisst or advise.

My wife is an American citizen and we've been filing joint tax returns for 17 years. She has an RRSP worth about $120K CAD. Up until 2015 when we lived in California, we always filed Form 8891 as part of our returns and chose the option of deferring taxes for US tax purposes on accrued but undistributed income. We also file a FBAR every year.

We moved overseas in 2015 and lived in Malaysia; we now live in Thailand. In 2016 we used a qualified expat tax consultant to file our 2015 returns. We are both retired and currently living off savings for awhile (our ages are 52 and 46). We hold valid retirement visas in Thailand and Malaysia. We have a decent sized investment portfolio but less than 10% is in taxable brokerage accounts and the rest is in a combination of self-directed brokerage account IRA's.

Our taxable income for 2016 was limited to U.S. C.D. and checking account interest, a a few small mutual fund distributions in the taxable brokerage account, some foreign interest in our Malaysian and Thai bank accounts and Malaysian fixed deposits that are required to stay on the visa program. After double checking with our tax consultant he deemed us as exempt from filing a 2016 return as the totals fell below the requirements for filing a return. We continue to file our FBAR of course.

According to the rules of Form 8938, taxpayers are not required to file if no income tax return is required even if the foreign assets exceed $10,000. We plan on not exceeding the threshold (barring any drastic changes to tax code) for about 5 to 8 more years until we begin taking small pensions. My concern lies with the continuation of tax exempt status for the assets in my wife's RRSP in the absence of filing a tax return. My tax specialist wanted an exorbitant sum to research if this is a problem so we decided to take a chance.

I'd rather not face rude surprises later in life when we file again once we begin drawing off our investments and begin to receive pension and social security income. Can anyone confirm that holding the RRSP doesn't generate any special requirements for tax exemption or filing any forms for those taxpayers otherwise exempt from filing a return? Anyone in a similar situation?


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Old 10-11-2017, 09:25 PM   #2
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Why don't you email the irs and ask them, I have done it before on a question. It does take them about a month or so to reply.

You can detail out the situation without using identifying information, much like you have explained it here, and even use a new/special email account. The answer they give should be good for whoever has your situation, so personal information is not needed.

Even just asking them the question is proof you were trying to do the right thing, in case they "catch up" with you sooner than expected.

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Old 10-11-2017, 11:04 PM   #3
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This might help.
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canadian accounts, rrsp, tax exemption

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