resident and has an RRSP and/or
RRIF but has never included any income on a Form 1040 from it is deemed to have made the election.
As well, if you don't take large payments at first, a
RRIF may earn considerably more for you over the long run.
60,000 in cash withdrawal for policies registered under the Income Tax Act such as RRSPs,
RRIFs, Life Income Funds and pension policies.
Keep in mind that any amounts removed from a
RRIF or RRSP will increase the individual's "net income", thereby causing a potentially significant tax bill and eroding benefits.
Taxpayers who report an RRSP or
RRIF on Form 8891 are relieved from reporting the RRSP or
RRIF on Form 3520, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts.
Finally, trustee and custodial services should be added to the exceptions, including fees for RRSPs and
RRIFs, as well as the new tax-free savings accounts (TFSAs).
If the election is made, the
RRIF will be taxed in the United States in a manner similar to how it is taxed in Canada.
A deceased person's RRSP or
RRIF may be transferred into an RDSP for a financially dependent child or grandchild.
The difference is that current-year earnings of an RRSP or
RRIF need to be reported on Form 1040, unless an affirmative election is made to defer tax until funds are distributed.
