How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Megan C Your Own Question
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16538
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
23669918
Type Your Finance Question Here...
Megan C is online now
A new question is answered every 9 seconds

I have designated my nephew as beneficiary of my traditional

Resolved Question:

I have designated my nephew as beneficiary of my traditional IRA. He resides in Belgium.
He will want to take a lump-sum distribution of my IRA after I die. I'd like to know at what rate will the US tax that distribution from my IRA.
Do I read correctly in the US-Belgium tax treaty that this "pension" payment will not be taxable in the US?
Thanks.
Submitted: 2 years ago.
Category: Finance
Expert:  Megan C replied 2 years ago.

Megan C :

Thank you for your question. My name is XXXXX XXXXX I will be happy to help you tonight

Customer:

Hello

Megan C :

Hello. I was looking over the tax treaty to verify my answer

Megan C :

Yes, the pension would only be taxable in Belgium

Customer:

OK. I was looking at IRS Publication 515. Normally, I believe that the US tax rate would be 30%, but the tax treaty may change that.

Megan C :

Yes, in absence of the tax treaty it's a flat 30%

Customer:

Could you indicate the section of the tax treaty that is applicable here?

Megan C :

But with the treaty, pensions are only taxable in your country of residence

Megan C :

Yes, it's Article 18

Customer:

OK, thank you.

Megan C :

You're welcome

Megan C :

Is there anything else I can help you with tonight?

Customer:

No. I want to check that I was clear that I am a US citizen, and my nephew (the IRA beneficiary) is a Belgian citizen who lives in Belgium. Was that clear?

Megan C :

yes, that is

Megan C :

When you are getting an inherited IRA it's taxed as if it is your pension

Megan C :

Because it is a pension account

Customer:

OK, that's all I need. Thanks.

Megan C :

You're welcome. If you would, please rate my response positive so that I may receive credit for assisting you today

Customer:

Sure.

Megan C :

Thanks!

Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16538
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and 2 other Finance Specialists are ready to help you