Hi, Last year I treated the RRSP as an asset and contributions as transfers from a Savings Account to the RRSP account. I think this is in line with what Dave is saying.
Although as you say contributions are tax deductible, earnings are tax-deferred; withdrawals are taxable I am not especially concerned about tracking that (my finances are fairly simple and I am not in any danger of exceeding any limits). My main concern is related to my budgeting especially when I start to draw down on the RRSP. If I merely transfer money from my RRSP to my checking account then I don't see how it becomes available in my Budget. That is why I was thinking it would be advantageous to treat contributions as an expense, similar to a pension contribution and to track it in a separate GNUCash file and then when I draw it down it would be an expense in the RRSP file and Income in my Main file. That seems simpler to me but I wanted to make sure I was not making creating other problems. Thanks for any further insights. Larry On 01/02/18 05:08 PM, "R. Victor Klassen" <rvklas...@gmail.com> wrote: > > The remaining unanswered question, which I think is part of the original > question, is what to do about withdrawals being treated as taxable income? > For those in the US, an RRSP is roughly equivalent to an (non-Roth) IRA. > Contributions are tax deductible, earnings are tax-deferred; withdrawals are > taxable. > > So I think the question is, how to account for contributions to a > tax-deferred account - not really expenses, but they do change current taxes > owed - and distributions: while it is truly a transfer from one asset account > to another, the distribution is treated as income by the taxing authorities. > > > On Jan 2, 2018, at 6:36 PM, DaveC49 <davidcous...@bigpond.com> wrote: > > > > Larry, > > > > I'm not familiar with the details of RRSP accounts in Canada so any comments > > here are general in nature and not taken as accounting advice per se. > > > > If it is a retirement savings account you would treat it as an Asset. > > Depending upon the conditions associated with withdrawal of funds from the > > RRSP you would most likely classify it as either a long term fixed asset or > > a current asset. For personal accounting this distinction is not as > > important as in business accounting, but can be still useful. (You could > > simply record eveything just under Assets if you wished and this met your > > requirements). > > > > If you can withdraw funds at any time at your discretion, then you would > > normally classify it as a current asset otherwise as a fixed asset. If there > > are rules about how much you can withdraw and how often in the future, you > > could continue to classify it as a fixed asset when you gain ready access to > > the funds at some future time. If the funds become freely available (on > > retirement for example), you could reclassify it as a current asset at this > > point in time. This simply requires having placeholder subaccounts for > > Fixed Assets and Current Assets under your Assets top level account and > > changing the parent account for your RRSP from Fixed Assets to Current > > Assets for example. It will just change what heading it appears under on the > > Balance Sheet > > > > If you are paying into the RRSP yourself, you are not creating an expense > > when you transfer the money even though it may actually go to whoever holds > > and maintains the RRSP account (it may be your bank for example) as you > > still retain ownership and the right to access the funds in the future. > > > > You are in this case exchanging one asset (cash in your bank account) for > > another asset (the increase in the balance of the RRSP), so there is no > > expense component of the transaction. The basic transaction will be: > > > > Debit > > Credit > > Asset:Bank:CheckAccount > > xxxx > > Asset:RRSP xxxx > > > > > > > > If you select double line mode (Menu->View->Double Line) when you click on a > > transactionof this type in an account register e.g. your RRSP account > > Register you should lines corresponding to both of the above components. > > > > Interest should be recorded as: > > Debit > > Credit > > Asset:RRSP yyy > > Income:InterestRRSP > > yyy > > > > Whether that interest is taxable or not under your local legislation will > > determine whether you classify it under TaxableIncome or NonTaxableIncome. > > > > When you withdraw funds from the RRSP to your bank account, the transaction > > will be the same as the deposit above with a reversal of the debit and > > credit entries,i.e.: > > > > Debit > > Credit > > Asset:Bank:CheckAccount xxxx > > Asset:RRSP > > xxxx > > > > Hope this helps with the recording of your RRSP. If your records are in > > anyway critical (e.g. tax and legal implications) it would be advisable to > > seek professional advice locally. > > > > David Cousens > > > > > > > > ----- > > David Cousens > > -- > > Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html > > _______________________________________________ > > gnucash-user mailing list > > gnucash-user@gnucash.org > > https://lists.gnucash.org/mailman/listinfo/gnucash-user > > ----- > > Please remember to CC this list on all your replies. > > You can do this by using Reply-To-List or Reply-All. > > _______________________________________________ > gnucash-user mailing list > gnucash-user@gnucash.org > https://lists.gnucash.org/mailman/listinfo/gnucash-user > ----- > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. > _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org https://lists.gnucash.org/mailman/listinfo/gnucash-user ----- Please remember to CC this list on all your replies. 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