I am a dual US - Cdn citizen living in the US who is retired. I withdrew from a RRIF for the first time in 2023 and this was my sole income. I received a lump sum of $135,000 CDN with 25% withholding of $33,750 CDN. NR4 has code 26. Do I create a 1099R? Will my gross and taxable amount be the same, converted in US $ or is my taxable amount less withholding taxes? I was anticipating a refund, but my calculations show I owe close to $7K. What am I doing wrong? Married filing jointly.
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It depends on what the exchange rate was in 2023. I have researched historical rates for 2023 and the average is around .72. Let's calculate.
Now since you paid the withholding to Canada, you will need to claim a foreign tax credit for the taxes you paid to Canada.
To report the income, go to:
As far as the Foreign Tax Credit, i don't have enough space in this post to go through the complete steps but I will get you started. You can reply back if you need additional help in completing this section.
Thank you for your reply. Is there a reason to use 1099-A rather than plugging it in as a 1099-R?
You aren't reporting this as 1099A income. You are reporting this as other income precisely in the manner I prescribed . You can enter this on a 1099 R but unless you have specific details about the issuer of the RRIF such as the EIN, it's best not to report on the 1099R because if it isn't reported correctly, you won't be able to efile your return.
IRS is not concerned so much how this is reported. It is only concerned that you report the income.
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