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.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
Can undeducted RRSP contributions be reduced to nil where they can not be withdrawn from the RRSP and they are preventing the contribution of new premiums?
Position:
No.
Reasons:
The law does not provide for this. Eventually they can be deducted and the undeducted balance will be reduced.
XXXXXXXXXX 991068
W. C. Harding
July 15, 1999
Dear XXXXXXXXXX:
Re: Elimination of over contribution to an RRSP
This is in reply to your letter of March 3, 1999, in respect of the elimination of an over-contribution to an RRSP.
Written confirmation of the tax implications inherent in particular transactions are given by this Directorate when the transactions are outlined in an advance income tax ruling request while comments and/or adjustments in respect of existing factual situations should be requested from your local tax services office. Accordingly, we are unable to provide any specific comments on your situation. However, we can provide the general information that follows below which may be of assistance.
It is our understanding that you contributed $XXXXXXXXXX to an RRSP in 1995. You deducted $XXXXXXXXXX of this amount on your 1996 income tax return and have since carried forward the balance of $XXXXXXXXXX. In the interim the value of the property in your RRSP has declined and may in fact be worth nothing. Given these circumstances you asked if Revenue Canada could revise its records to reduce the balance of undeducted contributions to nil in order to allow you to make new contributions to an RRSP.
The Income Tax Act (the “Act") provides that RRSP contributions made after 1990 may generally be carried forward and deducted in subsequent years to the extent a deduction is available in those years. The Act does not provide for the reduction or the elimination of any carry-forward of prior year contributions in situations such as yours.
We trust this information will be of assistance to you.
Yours truly,
P. Spice
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
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