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From: dave@utcsrgv.UUCP (Dave Sherman)
Newsgroups: can.general,net.taxes
Subject: Re: Cdn RRSP for income averaging
Message-ID: <3430@utcsrgv.UUCP>
Date: Sun, 4-Mar-84 01:14:07 EST
Article-I.D.: utcsrgv.3430
Posted: Sun Mar  4 01:14:07 1984
Date-Received: Sun, 4-Mar-84 04:43:18 EST
References: <3588@utzoo.UUCP>
Organization: The Law Society of Upper Canada, Toronto
Lines: 19

Henry Spencer says:
   "The roundabout route through the RRSP is probably accidental and will
   probably be blocked sooner or later."

It's only sort of accidental, and I doubt it will be blocked as long as
RRSP's stay in the system. Although the RRSP is deisgned for *retirement*,
some exceptions have to be allowed for disabilities and the like. In the
case of RRSP's, the entire plan is taxable in the year in which you
collapse it. Therefore, the implicit "disability" exception is that you
can (profitably) collapse your RRSP in a year in which you have lower
income and are thus paying tax at a lower marginal rate. Presumably, if
you are making less this year than in a previous year, you do have more
need of the money. (I'm speaking in general terms, of course; there are
lots of situations where this doesn't actually apply.)

Dave Sherman
Toronto
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