Hello,
1) I am a Canadian resident, dual US/Can citizen. In 2013, I cashed out a small pension from a Canadian University. Is this considered a "lump-sum" distribution for 1116 purposes? Or general income?
2) Also, where do I report this pension cash out on the 1040? I read somewhere that the IRS gives extra scrutiny to returns with more than $400 in the miscellaneous income category (due to concerns with the self-employment tax). Is there a way to specify that this is a foreign pension?
3) Do I use the exchange rate on the day the pension was cashed out?
Thanks Again :D
Pension Cashout and 1116
Moderator: Mark T Serbinski CA CPA
I am a US resident. In December of 2012 I elected to take a pension cash out from my Canadian municipal plan and the check with the tax withholding was cut on December 10, 2012, but I did not receive it and cash it until January 16, 2013. Do I use the exchange rate on the day that the check was issued for both the full distribution and the tax withheld or on the day that I actually cashed the check and received a payout in US dollars?
Second, Tax Act has a form FEC (Foreign Employer Compensation and Pensions) but I'm not sure if this is what I need to fill out and file in addition to reporting it on Line 16 a and b?
Any help would be appreciated. Thanks
Second, Tax Act has a form FEC (Foreign Employer Compensation and Pensions) but I'm not sure if this is what I need to fill out and file in addition to reporting it on Line 16 a and b?
Any help would be appreciated. Thanks
The rate shouldn't really matter, since you will use the same exchange for both the income and the tax. Technically, you recieved the money on dec 12.
Just to be certain, was the NR tax withheld EXACTLY 25%, or 15%? You should have an NR4 form issued to you.
The taxact form is their own, I would use it only IF it auto populates 16a/b. If not just "fake" a 1099-R.
The income is gen limit for 1116 purposes and is fully taxable in US.
Just to be certain, was the NR tax withheld EXACTLY 25%, or 15%? You should have an NR4 form issued to you.
The taxact form is their own, I would use it only IF it auto populates 16a/b. If not just "fake" a 1099-R.
The income is gen limit for 1116 purposes and is fully taxable in US.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Yes, at the 25% NTR taxrate, you rarely get the full credit.
You are taking a huge tax hit on this income this year (do you also have state tax?) but at least you will be done with that account.
You are taking a huge tax hit on this income this year (do you also have state tax?) but at least you will be done with that account.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing