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TaxRobin, Tax Preparer
Category: Social Security
Satisfied Customers: 15326
Experience:  15+ years in tax preparation and instruction
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I am a Saudi Aramco employee that will soon be forced into a

Customer Question

I am a Saudi Aramco employee that will soon be forced into a Joint Venture with Saudi Aramco. with that said, SA will early retire me with 20 years service and pay out the RIP in lump sum before conversion to the JV company. As a US expat, I I have an overseas mortgage of 100K that I would like to pay off with a fraction of this lump sum and roll the rest into an IRA. Questions are:
JA: The Retirement Accountant will know how to help. Is there anything else important you think the Retirement Accountant should know?
Customer: Is this possible under US tax laws and what are the penalties?
JA: OK. Got it. I'm sending you to a secure page on JustAnswer so you can place the $5 fully-refundable deposit now. While you're filling out that form, I'll tell the Retirement Accountant about your situation and then connect you two.
Submitted: 1 year ago.
Category: Social Security
Expert:  TaxRobin replied 1 year ago.


Only amounts that are rollover-eligible can be rolled over to an IRA or qualified employer sponsored plan. A qualified plan is under the rules of the US not a foreign country.

Individuals with savings in foreign pension plans may exercise one of two options. They can either leave the funds in those respective accounts and make pension withdrawals overtime, or withdraw lump-sum amounts and handle any tax implications as required. If amounts from these accounts are sent to the U.S. they cannot be sent to qualified trust accounts, which means they cannot be rolled over to your IRA, 401(k), 403(b) or any other qualified trust account. If these amounts are inadvertently or erroneously sent to U.S. qualified trusts, they will be considered ineligible rollover amounts, which must be timely corrected in order to avoid penalties and possible income tax upon withdrawal.

Your plan is not possible under US law.

Expert:  TaxRobin replied 1 year ago.

Checking to see if you responded