RDSP - how to enter grants & bond portion

[twj332]

How can I enter the grant and bond portion for a RDSP where I have contributed 1500.00 in own moneys and have 3500.00 in grant and 761.01 bond from the government?

Thanks
twj332

[Mark]

Hi twj332,

I'm not familiar with what an RDSP is? Maybe you can explain how it works, and I can then better try to help with the best way to enter it.

[twj332]

A registered disability savings plan (RDSP) is a savings plan that is intended to help parents and others save for the long-term financial security of a person who is eligible for the Disability Tax Credit.

Contributions to an RDSP are not tax deductible and can be made until the end of the year in which the beneficiary turns 59 years of age. Contributions that are withdrawn are not to be included as income for the beneficiary when paid out of a RDSP. However, the Canada disability savings grant (CDSG), Canada disability savings bond (CDSB) and investment income earned in the plan will be included in the beneficiary’s income for tax purposes when paid out of the RDSP.

Depending on income level the gov't provides a grant portion and a bond portion - each is esentially cash which they deposit to the account once setup and an initial contribution is made.

Grant amount

If the Beneficiary's Family Income is less than or equal to $78,130:

* For the first $500 contributed each year to the RDSP, the Government will deposit $3 for every $1 contributed, up to $1,500 a year.
* For the next $1,000 contributed each year to the RDSP, the Government will deposit $2 for every $1 contributed, up to an additional $2,000 a year.

If the Beneficiary's Family Income is greater than $78,130:

* For the first $1,000 contributed each year to the RDSP, the Government will deposit $1 for every $1 contributed, up to $1,000 a year.

Note: Income amounts shown are for 2010. The income amounts are updated each year based on the rate of inflation.

Bond amount

If the Beneficiary's Family Income is less than or equal to $21,947:

* The Government deposits $1,000 each year to the RDSP.

If the Beneficiary's Family Income is between $21,947 and $39,065:

* The Government deposits a portion of the $1,000 to an RDSP each year. As your income increases, the bond amount paid into your RDSP decreases.

Note: Income amounts shown are for 2010. The income amounts are updated each year based on the rate of inflation.

I hope this will help explain what it is and how it works.
Twj332

[Mark]

Hi Twj332,

Thanks for the explanation. I have a couple options you may consider:

1) Create 3 separate investments, one for your contribution, one for the grant, and one for the bond. Put them all into a sub-portfolio called RDSP or whatever you want. This will allow you to track them separately, plus also see the total.

2) If you do not care to keep track of who contributed what, just put them all in as if you had made the contributions. You could record the grant/bond portions as either purchased at the actual price, or at 0. If you record them at 0, your returns will look very good, since you are getting shares at no cost. Alternatively, you can record them at the actual purchase price. It just depends on what you want tracked.

[twj332]

Thanks will do
twj332