Canadian RRSP reporting on Schedule B of 1040

[SvilenM]

Hi,

Do owners of Canadian RRSP accounts have to report them on Schedule B, even when the interest of the RRSP is stated as 0? I know I have to report the RRSP when filing FBAR and 8938 (if necessary). In fact, in the case of RRSP reported on 8938, that form asks where (Schedule and line number) that RRSP interest was reported.

Thanks

[MarilynG1]

Most Canadian RRSP's are only reported when a distribution is taken.

At that time, the income is reported under Wages & Income > Miscellaneous Income, 1099-A, 1099-C > Other Reportable Income, with description 'Canadian RRSP' and Amount.

If Canadian tax was paid, you can claim a Foreign Tax Credit as well.

You will not be required to file Form 8938 or FBAR for your Retirement account.

Here's details Comparing Form 8938 and FBAR.

[SvilenM]

Hi,

Thanks for replying.
I have to file 8938 not only because of the RRSP but because of overall value of my foreign accounts. And I have been filing FBAR for years with the RRSP reported there. I don't have distributions nor contributions from/to the RRSP. But this year I have to file 8938 because I went over the reporting limit. From what I read, RRSPs are to be reported in the Other financial assets section of the 8938 and if I do that,the form (8938) asks where, on which schedule and line number the interest from the RRSP was reported. Interest is 0, though.

Thanks

[SusanY1]

This is correct.  If you are subject to 8938 reporting, you will list your RRSP as an "other financial asset" with a value of 0 (since that's the value of your distributions and you don't have a year-end fair market value available to report.)

 

[SvilenM]

Yes, I know that. My question was really about whether or not I should report the RRSP on Schedule B. TurboTax generates an error during my federal check that I need to enter in  part III line 14 of 8938 the form or schedule where the RRSP was reported, although it has a 0 interest. And I am at a loss hee, because I have no other place where the RRSP was reported except 8938 and FBAR.

[SusanY1]

In the TurboTax entry screen where it asks about the income (dividends, interest, etc.) leave that page blank.  The zero goes in where you enter the maximum account value only. This should clear the error.  

The screen that looks like the one below should be blank since you don't have income to report.  

[SvilenM]

OK, that makes it easy. But also makes me wonder if I put 0 for the max account value (for the RRSP) that will make me fall below the reporting limit for 8938 because the sum total of the remaining foreign financial assets is lower than the limit. It goes over it if I include the RRSP account value.  So, in this case do I have to file 8938 at all? Or said differently, when calculating my total financial assets against the filing thresholds, do I need to add the RRSP to the sum?
Thanks

[DaveF1006]

Yes, you do need to report the RRSP because it is a Foreign Financial Asset as stated in this IRS document. Look under What are the specified foreign financial assets that I need to report on Form 8938? In that section, it lists an interest in a foreign retirement plan or deferred compensation plan

The amount would be added to all of your other Foreign Financial Assets and if this brings the total over the filing threshold, you will need to include a 8938 in your return.  No exceptions!!

@SvilenM 

[SleeplessInCanada]

It sounds like the balance in an RRSP should be considered to be zero unless you received a distribution from the plan, and you should not include its balance in the total of value of your foreign accounts when determining whether you need to file Form 8938, but if you need to file the FATCA form because non-RRSP assets exceed your threshold, then you need to report the RRSP, but declare its value as zero, based on this IRS page: https://www.irs.gov/businesses/corporations/basic-questions-and-answers-on-form-8938#overview

How do I value my interest in a foreign pension or deferred compensation plan for purposes of report...

In general, the value of your interest in the foreign pension plan or deferred compensation plan is the fair market value of your beneficial interest in the plan on the last day of the year.   However, if you do not know or have reason to know based on readily accessible information the fair market value of your beneficial interest in the pension or deferred compensation plan on the last day of the year, the maximum value is the value of the cash and/or other property distributed to you during the year.  This same value is used in determining whether you have met your reporting threshold. 

If you do not know or have reason to know based on readily accessible information the fair market value of your beneficial interest in the pension plan or deferred compensation plan on the last day of the year and you did not receive any distributions from the plan, the value of your interest in the plan is zero.  In this circumstance, you should also use a value of zero for the plan in determining whether you have met your reporting threshold.  If you have met the reporting threshold and are required to file Form 8938, you should report the plan and indicate that its maximum is zero.