Payment from IRA to taxpayer was payment out of foreign retirement arrangement

Tax court of Canada | Tax | Income tax | Foreign income

Taxpayer’s father died and left taxpayer U.S. individual retirement account (IRA). Taxpayer’s share was rolled over to IRA in his name and funds were distributed to him, with amounts withheld for U.S. income taxes. Canada Revenue Agency (CRA) added amount in IRA to taxpayer’s income and allowed him foreign tax credit to account for U.S. taxes withheld. Taxpayer appealed on ground that IRA was inheritance. Appeal dismissed. Taxpayer received amount as distribution from IRA and not from father’s estate. Payment from IRA to taxpayer was clearly payment out of “foreign retirement arrangement” within meaning of s. 56(1)(a)(i)(C.1) of Income Tax Act. Result of legislation was to treat IRA distribution in much same way as if it was distribution from RRSP of his father. As result, distribution had to be included in taxpayer’s income.

Owen v. The Queen (2018), 2018 CarswellNat 2131, 2018 TCC 90, Gaston Jorré D.J. (T.C.C. [Informal Procedure]).

Free newsletter

Our daily newsletter is FREE and keeps you up to date on all the developments in the Ontario legal community. Please complete the form below and click on subscribe for daily newsletters from Law Times.

Recent articles & video

Alexander Holburn opens Toronto office

Comic book helps newcomers find legal resources

Burford Capital makes governance change ahead of US IPO plan

Appeal court ‘withdraws’ real estate decision after it was signed in error

Challenges continue for legal aid practitioners despite funding boost from Ottawa

Orlando Da Silva to receive Youth Mental Health Hero Award

Most Read Articles

Appeal court ‘withdraws’ real estate decision after it was signed in error

Former Bennett Jones partner Hugo Alves to become CEO of cannabis firm Auxly

Province should be cautious using ADR for domestic violence cases, say lawyers

Challenges continue for legal aid practitioners despite funding boost from Ottawa