Principal Issues: Whether amounts on 1099-R slip received by Canadian resident are taxable
Position: Unable to answer
Reasons: Since this is a completed transaction, the TSO will determine the tax consequences.
XXXXXXXXXX 2005-012948
S. E. Thomson
May 26, 2005
Dear XXXXXXXXXX:
Re: XXXXXXXXXX - U.S. Annuity
This is in reply to your letter of April 27, 2005 in which you ask for a "ruling" for the above taxpayer. We left a message on your voicemail on May 13th, but have not had a reply to date.
Your client has received a Form 1099-R with respect to a settlement of her father's estate in the United States. You would like to know if the amounts on the Form 1099-R need to be included on your client's T1 return, and if the tax withheld may be claimed as a foreign tax credit.
OUR COMMENTS
Since your request involves both a specific taxpayer and a completed transaction, the Income Tax Rulings Directorate is precluded from commenting on the situation. The responsibility for determining the tax consequences arising from completed transactions rests with the tax services offices serving the taxpayer. As such, the tax services office will, upon disclosure of all of the relevant facts, be able to assist you in clarifying the tax consequences pertaining thereto. The tax services office serving Calgary is located at:
Calgary Tax Services Office
220-4th Avenue South East
Calgary, Alberta
T2G 0L1
The amount on the Form 1099-R appears to be a lump sum payment from a U.S. annuity. Since the taxation of foreign annuities in Canada can be quite complex, we suggest that you send to the tax services office as much information as you have. For example, they may need to know:
? Is the annuity a deferred retirement plan such as a 401k plan or an I.R.A.?
? What was the year of death?
? When was the payment received?
? Who was the beneficiary of the annuity - the estate, or the taxpayer?
? Was the annuity paid in a lump-sum, or will there be periodic payments?
? Is the taxpayer a citizen of the U.S.?
? How much was included on her T1?
We will be happy to assist the tax services office if they consider it necessary.
Yours truly,
Olli Laurikainen, C.A., Manager
for Director
International & Trusts Division
Income Tax Rulings Directorate