10 - Retirment Savings Plans

Question 1

Are RSP accounts creditor protected

Answer 1

Only contributions made after 12 months

Question 2

Are DPSP creditor protected

Answer 2

Yes

Question 3

3 points regarding in kind RRSP contributions

Answer 3

Loss is set to zero and can’t be claimed, if sold and repurchase would have been superficial

If debt securities, include interest as of transfer day to contribution amount

If in kind security contribution in first 60 days, tax contribution can be used in previous year but capital gains is realized the year it happens so it is delayed to next tax return

Question 4

Is $2k over contribution tax deductible

Answer 4

No, and it can remain in RSP and become tax deductible in next year. If always keep additional $2k it is double taxed

Question 5

Charge for RSP over contribution

Answer 5

1% per month (minus $2k).

Called cumulative excess amount

Question 6

What is the form to complete for RSP over contribution

Answer 6

T1 - OVP

Question 7

What does cumulative excess amount CEA mean

Answer 7

Amount over allowable over contribution limit

Question 8

When do attribution rules not apply to spousal RRSP withdrawal 3

Answer 8

Neither spouse lives in Canada
Contributing spouse died
Marriage breakdown

Question 9

5 non qualifying investments in RRSP

Answer 9

Shares and debt in private corporation

Real estate (REITs allowed)

Commodity and futures

Listed personal property ie. jewelry

Uncovered calls and all puts.

Question 10

Penalty for holding non qualifying in RRSP

Answer 10

One time 50% tax once transferred or bought

Waived if quickly disposed of

Must be disposed of by end of year after penalty applied

Question 11

First time home buyers definition

Answer 11

Not owned a home for 4 calendar years preceding year of withdrawal

Waived for disabled

Question 12

HBP withdrawal amount

Answer 12

$35k each

Question 13

When do you need to get home by

Answer 13

October 1 of following year. Or it is taxed as income

Question 14

Payment requirements for HBP

Answer 14

Pay over15 year

Must begin by second year following withdrawal or March 1st of 3rd year

Question 15

How are payments affected with lump sum payments

Answer 15

Recalculate

Question 16

Can HBP repayments go to spousal RRSP

Answer 16

No

Question 17

What happens with repayment if client turns 71

Answer 17

No further payments
Included as income as scheduled payments become due

Question 18

What RRSP contributions are excluded in HBP amount

Answer 18

Those 90 days before withdrawal

Question 19

How much can be withdrawn for LLP

Answer 19

$10k annually over 4 years, not over $20k

Question 20

How does repayment work for LLP

Answer 20

Over 10 years

Starting 60 days after5th year following 1st withdrawal

• may be earlier if failed

Question 21

Can you participate in HBP and LLP together

Answer 21

Yes

Question 22

Who is a qualified beneficiary of RRSP 3

Answer 22

Spouse
Dependent minor child or grandchildren
Physical/ medical dependent child or grandchild

Question 23

What constitutes being financially dependent

Answer 23

Income below basic personal amount. Around $12k

Question 24

What is RRIF beneficiary is a disabled financially dependent child/ grandchildren

Answer 24

No tax to deceased, child can keep RRSP and put up to $200k in RDSP

Question 25

What if RIF beneficiary is a financially dependent child /grandchild

Answer 25

No tax on death, rollover to child who must buy an annuity to age 18