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Old 23.11.2021, 21:37
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Financial Advisory company in US closing wife's IRA Account

Ok, so long story short, I met and married my wife in the US some years ago. While living there (her a green card holder at the time) we contributed to separate IRA retirement IRA accounts. Since living here since 2012 we have not contributed to these US IRA accounts but have a Swiss retirement thing paying into since about 10 years.

She got a letter a couple weeks ago that they need to close her IRA account in 2 months (so end of year at this point), because she is neither living in the US nor a Citizen and must pay her out. Apparently mine is OK as I'm a US Citizen. So, trying to find a way to get her money here with as little taxation as possible...

I understand that this money will most likely be taxed by the US as it deposited into the IRA as pretax income so since it's leaving the US, they'd want their 30%. I wish we could find another place in the US to put it so this doesn't happen until actual retirement. She's not self employed so no self-employed IRA/401 thingee.

So, trying to really see how to pay as little taxes as possible.

Since the money was earned pre- living here, wouldn't only interest since living here be taxable here in CH? Our Swiss tax guy was just dropped this bombshell of research today so we don't know how much help he can be as the Swiss do their pension stuff different.

Anyway, any ideas as to a good solution or tax advisor that has knowledge with these matters would be awesome. I'll also send out some feelers to some of the links in the tax forums here too.

Thanks in advance and be well citizens!
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Old 23.11.2021, 21:44
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Re: Financial Advisory company in US closing wife's IRA Account

Why would any of it be taxable here, except as capital (which is around .1 per mill)

Tom
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Old 23.11.2021, 23:00
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Re: Financial Advisory company in US closing wife's IRA Account

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I understand that this money will most likely be taxed by the US as it deposited into the IRA as pretax income so since it's leaving the US, they'd want their 30%.
Consideration could be given to filing a 1040NR to reclaim part of the 30% IRA distribution withholding by the financial institution.
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Old 24.11.2021, 09:29
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Re: Financial Advisory company in US closing wife's IRA Account

Can inquire here. But since the missis is not a US citizen it may be a no go.
https://www.sdfcu.org/
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Old 24.11.2021, 09:55
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Re: Financial Advisory company in US closing wife's IRA Account

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Anyway, any ideas as to a good solution or tax advisor that has knowledge with these matters would be awesome.
I can recommend USS Tax Advisors www.usstax.com. They aren't cheap, but they are very experienced with both the US and Swiss tax systems and the tax treaty. They will have seen this problem before and know what your options are. In particular, the new tax treaty acknowledges reciprocity between Swiss Pillar 3 accounts and US IRAs, so there might be a way to avoid early withdrawal penalties (and some taxation?) by converting directly between the 2 systems.
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