10 - Retirment Savings Plans Flashcards
Are RSP accounts creditor protected
Only contributions made after 12 months
Are DPSP creditor protected
Yes
3 points regarding in kind RRSP contributions
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
Is $2k over contribution tax deductible
No, and it can remain in RSP and become tax deductible in next year. If always keep additional $2k it is double taxed
Charge for RSP over contribution
1% per month (minus $2k).
Called cumulative excess amount
What is the form to complete for RSP over contribution
T1 - OVP
What does cumulative excess amount CEA mean
Amount over allowable over contribution limit
When do attribution rules not apply to spousal RRSP withdrawal 3
Neither spouse lives in Canada
Contributing spouse died
Marriage breakdown
5 non qualifying investments in RRSP
Shares and debt in private corporation
Real estate (REITs allowed)
Commodity and futures
Listed personal property ie. jewelry
Uncovered calls and all puts.
Penalty for holding non qualifying in RRSP
One time 50% tax once transferred or bought
Waived if quickly disposed of
Must be disposed of by end of year after penalty applied
First time home buyers definition
Not owned a home for 4 calendar years preceding year of withdrawal
Waived for disabled
HBP withdrawal amount
$35k each
When do you need to get home by
October 1 of following year. Or it is taxed as income
Payment requirements for HBP
Pay over15 year
Must begin by second year following withdrawal or March 1st of 3rd year
How are payments affected with lump sum payments
Recalculate
Can HBP repayments go to spousal RRSP
No
What happens with repayment if client turns 71
No further payments
Included as income as scheduled payments become due
What RRSP contributions are excluded in HBP amount
Those 90 days before withdrawal
How much can be withdrawn for LLP
$10k annually over 4 years, not over $20k
How does repayment work for LLP
Over 10 years
Starting 60 days after5th year following 1st withdrawal
- may be earlier if failed
Can you participate in HBP and LLP together
Yes
Who is a qualified beneficiary of RRSP 3
Spouse
Dependent minor child or grandchildren
Physical/ medical dependent child or grandchild
What constitutes being financially dependent
Income below basic personal amount. Around $12k
What is RRIF beneficiary is a disabled financially dependent child/ grandchildren
No tax to deceased, child can keep RRSP and put up to $200k in RDSP
