Form 8891 - How to report transfers?

I have a question regarding disclosing RRSP transfers on Form 8891.

I have had different RRSP accounts at various times over the past years. Assets have been transferred (tax-deferred) from one RRSP account to another on 4 occasions. I am wondering in regards to Line 7a and 7b on Form 8891, whether these types of transfers would be considered "Distributions received from the plan". Technically, i didn't receive anything because i didn't withdraw. these were transfers.

But in doing some research, it appears that the value entered on Form 8891 line 7a and 7b would be entered on Form 1040 line 16a and 16b. And the 1040 instructions discuss about rollovers from a qualified plan to another. it also refers to Pub 575 which mentions about a "direct rollover option" that sounds very much like the tax deferred transfer of RRSP assets from one account to another. so based on this, my understanding would be in a year that the RRSP assets were transferred, i would enter the transfer amount on Line 7a (as it was not taxable) and then enter $0.00 as the end of year balance on Line 8. And for the new RRSP (transferee), i would file a separate Form 8891 only disclosing the year end balance on Line 8 and not have to enter the contribution amount (from the old RRSP) on Line 9 because I would be electing to defer taxing so I can skip the rest of the form after Line 8.

For the new RRSP, my understanding is despite the assets being the same, would I have to make a new election on 8891 to defer taxing and not carryover the old deferral year from the previous account because these are different accounts?

Also, a side question regarding dividends reinvested in the plan. Would these be considered as "Distributions Received" for purposes of Line 7a. I don't think it is but some people I've asked seemed to think it does.

Sorry for the long question but the instructions are so vague it leaves everything to interpretation. It be interesting to see if I'm thinking on the same page as others.

The instructions are vague because the tax treaty changed, if you want vague, have a look at the CRA instructions for declaring an IRA in Canada, which basically says "phone the CRA" for instructions.

Basically distributions from an RRSP you may hold now that you are a tax resident of the US are only subject to US income tax if you moved your tax home there prior to 2008, i.e. you have to pay income tax for the 2007 tax years and prior but not 2008 and later. After that they're treated as IRAs but you have to declare you have them to the IRS on Form 8891.

The IRS told me that IRS publication 597 is being re-written to explain all this but it's not out yet.

I'm afraid the technicalities of which box to check on the forms is something you'll have to discuss with the IRS and you'll sit on the phone forever to get someone who has a clue about this one, but now that you've got an idea about the tax treaty perhaps that will help!

Basically distributions from an RRSP you may hold now that you are a tax resident of the US are only subject to US income tax if you moved your tax home there prior to 2008, i.e. you have to pay income tax for the 2007 tax years and prior but not 2008 and later. After that they're treated as IRAs but you have to declare you have them to the IRS on Form 8891.

Basically I'm in a situation where i need to file Form 8891 retroactively past years because I was unaware of the requirement to file this form. But I had transferred (non-taxed) from one RRSP account to another. I'm not sure if this would be considered as a "distribution received from the plan". To me, a distribution is if I actually received the money in an account that is not an RRSP, which was not the case.

You also mentioned about new tax laws post 2008. Would a definition of a transfer be considered different pre-2008 to post-2008?

I've asked a few people and some say transfers from RRSP to RRSP are not considered distributions and some have no clue.

A transfer is a transfer, a distribution is a distribution. If you're just moving money from one account to the other I don't see what bearing that has on anything tax-wise. Distributions are taxable prior to 2008, which is briefly mentioned in IRS publication 597.

A transfer is a transfer, a distribution is a distribution. If you're just moving money from one account to the other I don't see what bearing that has on anything tax-wise. Distributions are taxable prior to 2008, which is briefly mentioned in IRS publication 597.

yeah, i'm probably over complicating the language of the instructions. so in the case where the balance is transferred completely to another account, how would i enter the year end balance? it seems odd to enter $0.00. i was considering just entering the amount transferred and making a note clarifying that the money was transferred to another account.

A form is a form, if the form doesn't elicit the correct information or is poorly worded, include a letter of explanation. Your obligation is to comply with the law, not to fill out a form.

Just a quick clarification to this old post:

RRSP have NEVER been taxable in US if one followed the correct reporting procedure, which have been continuously been in place, in various forms, since 1985. Nothing special happened in 2007 or anytime before to suddenly make RRSP's non-taxable. Nothing in the treaty has changed.

As to reporting a transfer, in the year of the transfer, you prepare 2 form 8891's, one for the old account will simply show a 0.00 year-end, and the one for the new will show the year-end balance. The election date for the new account is the same year that was on the old account.

Neither will show any "distribution", neither gross or net. If you are submitting paper forms, you *could* write account closed/transfered an dtie it to the new account, but this is not necessary, and does not need to be done for online filing.

Reviving an old thread...

Last year, I transferred my RRSP and RESP accounts to different account types with the same bank - straight transfer of assets, no distributions. The only thing that changed were the account numbers.

I've previously filed the 8891, 90.22-1, and 3520/3520A forms.

How do I handle the 90.22-1 and 3520/3520A forms? Do also submit 2 forms for both the old and new account numbers? For the 3520, do I need to request a new EIN?

Thanks.

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