Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
XXXX W.C. Harding (613)957-3499
Attention: XXXX Supervisor Transfer-In Registered Savings Plans
July 28, 1988
Dear Sirs:
This is in reply to your letter received on July 7, 1988, requesting clarification of certain comments made in our letter to you dated June 24. In particular you have asked if the phrase "undeductible contribution in excess of $5,500" is a technical anomaly given that the annual RRSP contribution limit is $7,500.
The definition of excess contributions in section 204.2 of the Income Tax Act provides that only the contributions and gifts in excess of the greater of the contributions deductible in the year or in the immediately preceding year and $5,500 will be considered excess contributions. That is, if, in a particular year a taxpayer's deductible contribution is $5,500 or more, then only those contributions in excess of the deductible amount (and which are otherwise not deductible in the preceding year) will be excess contributions. On the other hand, if the taxpayer's deductible contribution is less than $5,500, then only those contributions in excess of $5,500 will be considered excess contributions.
We trust that these comments are of assistance to you.
Yours truly,
for Director Financial Industries Division Rulings Directorate
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© Her Majesty the Queen in Right of Canada, 1988
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© Sa Majesté la Reine du Chef du Canada, 1988
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