Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax
This answer was rated:

I am a Green Card holder and would like to know if I would

have to pay US tax...
I am a Green Card holder and would like to know if I would have to pay US tax on a lump sum distribution from my UK pension (I delayed applying for my UK pension for six years). Or, would it better to take the extra monthly amount of pension?
Show More
Show Less
Ask Your Own Tax Question
Answered in 2 minutes by:
11/7/2013
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15,887
Experience: 15years with H & R Block. Divisional leader, Instructor
Verified

Robin D. :

Hello and thanks for trusting me to help you today. I am a tax adviser with over 15 years of experience.
Per the tax treaty with the UK, you would be taxed in your resident country. If you are resident in the US then that is the country that would tax you.
The US does not look at lump sum distributions like the UK does. Just as with domestic pensions or annuities, the US taxable amount generally is the Gross Distribution minus the Cost (investment in the contract). Income received from foreign pensions or annuities may be fully or partly taxable.

Robin D. :

My goal is to give you excellent service. If you are satisfied, please rate me. If you have follow-up questions on this same topic, use the reply box below. To start a new conversation with me on a new topic request me again.

Customer:

What does "Gross distribution minus the cost (investment in the contract" mean? I read this in the tax treaty and did not understand what it meant. If I understand you correctly, if I take a lump sum I will be taxed on it the US. In that case, will it be taxed as unearned income?

Robin D. :

That means that the money you invested in the pension (if any) is not taxable). If your pension is worth $100,000 and you had initially over the years contributed $50,000 then that $50,000 is your cost and is not taxable when you receive the distributions.

Robin D. :

This is not always the case because some pensions are not employee contributed pensions. The pensions are paid based on time with the company or service.

Robin D. :

Yes, if you receive a distribution form the pension (lump sum or payments) you will need to report that in the US

Robin D. :

It is added to your income (not seen as earned income) and taxed at regular rates

Customer:

This is a government pension based on contributions from my salary, the same of SS in US.

Robin D. :

Then you do not have cost in it perse.

Customer:

So, I am still not clear if I will have to pay tax on a lump sum. This is the government pension (same as SS in the US).

Robin D. :

Yes

Robin D. :

You will be taxed in the US on the lumpsum amount

Customer:

OK, thanks for the info, very helpful.

Robin D. :

You are most welcome.
Your positive rating is always thanks enough.

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15,887
Experience: 15years with H & R Block. Divisional leader, Instructor
Verified
Robin D. and 87 other Tax Specialists are ready to help you
Ask your own question now
Ask Robin D. Your Own Question
Robin D.
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15,887
15,887 Satisfied Customers
Experience: 15years with H & R Block. Divisional leader, Instructor

Robin D. is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,310 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

15,887 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
I quit my job in October. I have an additional earned income
Hello, I quit my job in October. I have an additional earned income $15,312 to contribute to my former Roth IRA that I started when I was working. This was income earned in 2017. Is this permissible? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
My client is a foreign corp in Slovakia with no PE in the US
My client is a foreign corp in Slovakia with no PE in the US and does not want a US subsidiary but would like to hire 2 US persons - what is the best way to do that? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
15,887 satisfied customers
A foreign individual is a member of a US LLC. Are there any
A foreign individual is a member of a US LLC. Are there any extra requirements for filing when it comes to the partnership return?… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,483 satisfied customers
The taxable amount on my Statement of Survivor Annuity Paid is unknown
My mom has a 1099R form that is titled Statement of Survivor Annuity Paid. It is a death benefit from my father who passed away in 1993. The gross distribution is 12156. and the taxable amount is unkn… read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
1099-R with distribution code 3. Can I get an earned income credit?
If someone receives a 1099-R with a distribution code 3, can they qualify for earned income credit? The person receives his pension because he became disabled.… read more
Bizhelp
Bizhelp
Certified Public Accountant (CPA)
Bachelor's Degree
638 satisfied customers
I am receiving some income from a foreign government "social
I am receiving some income from a foreign government "social security-type" benefit program. Where should I report this income in my Tax Return? Should I report it as "Other Foreign Financial Assets"?… read more
abci168
abci168
Principal
27 satisfied customers
Does a foreign government type "social security" benefit
Does a foreign government type "social security" benefit plan need to be reported on an FBAR as a Foreign Financial Account?… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,483 satisfied customers
Client (US resident) with foreign salary and taxes paid in
Client (US resident) with foreign salary and taxes paid in foreign currency - Part II of 1116 form for some reason adds taxes paid only in US $ (line "o" through "r") - it does not take taxes paid in … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I am a US resident living in the US employed by a foreign
I am a US resident living in the US employed by a foreign employer that does not have a US entity. I am an employee, and mostly performed services abroad. My employer does not do US payroll withholdin… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,483 satisfied customers
I have an NR4 Income Code 49 Pension Plan Beneifts - does it
I have an NR4 Income Code 49 Pension Plan Beneifts - does it need to be recorded on the 1040 form.… read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
736 satisfied customers
Us citizen living and working in colombia SA earned income
us citizen living and working in colombia SA earned income and unearned how do i report the interest and dividends are these tax at he same rate or can you also exclude them like the earned income … read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
736 satisfied customers
Do I need to pay taxes on income from a foreign company
Do I need to pay taxes on income from a foreign company based in Colombia? … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Robin D Regarding your answer to" i have a foreign pension
Hello Robin D Regarding your answer to " i have a foreign pension fund that is not complying for US" if I live overseas and my foreign wages exceed 120000$ is the unrealized income from the fund taxab… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Foreign Income - I have a new taxpayer client. * She is a US
Foreign Income -I have a new taxpayer client. * She is a US citizen. * Was married in Austria and still married to the Austrian. * Marriage is not recognized in the US. * Has rental house in US, no ea… read more
Robin D.
Robin D.
Senior Tax Advisor 4
15,887 satisfied customers
Foreign earned income tax exemptions. My husband started
foreign earned income tax exemptions. My husband started working in the UAE in February 4, 2017. How many days is he allowed to physically visit the USA in a 12 month period to be qualified for the ex… read more
Robin D.
Robin D.
Senior Tax Advisor 4
15,887 satisfied customers
Foreign Income - Client is a US Citizen. Client travels to
Foreign Income -Hello,Client is a US Citizen. Client travels to United Kingdom to work for two weeks. She is paid by a US company and a Canadian Company for her services. How is that two weeks of Earn… read more
Robin D.
Robin D.
Senior Tax Advisor 4
15,887 satisfied customers
I need to connect with a tax expert on foreign earned income
I need to connect with a tax expert on foreign earned income and filing back taxes … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,483 satisfied customers
When utilizing the foreign earned income exclusion and
When utilizing the foreign earned income exclusion and housing deduction on Form 2555 and coordinating with the Form 1116, the foreign tax credit must be reduced a formula for prorating tax credit ava… read more
Robin D.
Robin D.
Senior Tax Advisor 4
15,887 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x