Spousal RRSP Question

[dealzuser]

Hello,

From what I read about Spousal RRSP, it works like this:

i.e. Husband has room of $7500, Wife has room of $5000.
- Husband contribute to a spousal RRSP account that belongs to the wife (and his own account) up to a combined $7500. Husband claims $7500 on his tax return.
- Wife can contribute to her own account $5000. Wife claims $5000 on her tax return.

Benefit - when the wife's income drops to below a threashold (i.e. retire, stay home to raise kids), and the husband still makes more than her, she can take out money from spousal account and get taxed less (or not at all)

Question: - my colleague tells me that the husband can actually put in $7500 + $5000 into the spousal RRSP account, and claim all of that on his taxes. Since he's in a higher bracket (taxed more), then he lowers his income more, and gets more back.

That's not how I understand it, but he says this is actually legal... Can anyone comment on whether this is actually legal? (Or if they've heard of that?)

Thanks

[15-20_God]

as far as i am aware each is only able to claim up to and including their contribution limit, be it through a spousal or regular rsp.

also, if the wife is looking to withdrawal from the rsp you may want to look at the income attribution rules for this.

[aximrocks]

You can contribute to a spousal RRSP up to your RRSP contribution limit. i.e. $7500 in this case. Withdrawals from a spousal RRSP are subject to a “three-year rule”. If money is withdrawn from a spousal RRSP in the same year a contribution was made or within the two following calendar years, the income received will be attributed back to the contributing spouse, not the owner of the RRSP.

[sunnybono]

Hello,

From what I read about Spousal RRSP, it works like this:

i.e. Husband has room of $7500, Wife has room of $5000.
- Husband contribute to a spousal RRSP account that belongs to the wife (and his own account) up to a combined $7500. Husband claims $7500 on his tax return.
- Wife can contribute to her own account $5000. Wife claims $5000 on her tax return.

Benefit - when the wife's income drops to below a threashold (i.e. retire, stay home to raise kids), and the husband still makes more than her, she can take out money from spousal account and get taxed less (or not at all)

Question: - my colleague tells me that the husband can actually put in $7500 + $5000 into the spousal RRSP account, and claim all of that on his taxes. Since he's in a higher bracket (taxed more), then he lowers his income more, and gets more back.

That's not how I understand it, but he says this is actually legal... Can anyone comment on whether this is actually legal? (Or if they've heard of that?)

Thanks

Your friend/collegue is incorrect. $7500 is what you would claim/deduct & $5000 is what your wife would claim/deduct. As per ownership, its all hers!!!!!!!(Haven't you learned yet: What's mine is hers & what's hers is hers :cheesygri :cheesygri :cheesygri )

sk