Foreign Employer Work Pension

[rphdenis]

How to PROPERLY report a foreign employer work pension and be able to file ELECTRONICALLY?

I don't want to create a substitue 1099-R with a mock TIN, nor declare it as other income, which does not treat the income as retirement and doesn't transfer properly to the state form.

From the information I'm gleaning left and right, I understand that TT is unable to properly deal with this type of income. Is this correct? Because apparently, a competitor deals with this smoothly and without having to use any kind of bypass etc.

[pk]

@rphdenis , yes there had been some posts on the subject.  Can you tell me what kind of pension ( private,  govt. service based or Social Security  equivalent , annuity etc. ) and also from which country ( some tax treaties controls which country ( ies ) can tax the  pension income.

I will circle back once I hear from you --yes ?

[rphdenis]

Thank you for your response.

This is a pension from an employer. Not social security, annuity etc. I know the difference.

It is from Canada. Not tax exempt but special treatment for state.

And no, I don’t want to use the discontinued IRS form 8891 and I don’t want to paper file either.

What I would like, is for TT to fix this like other softwares apparently have.

Thanks again!

[pk]

@rphdenis , I am sorry if I have offended you.   Please be assured that I had no intention of questioning your knowledge and/or familiarity  with the  taxation of foreign pension.  Please consider forgiving my trespass.

In the meantime , I have simulated  on TurboTax windows  version of Home & Business --- the scenario

1.  US person aged 65,  filing as single and no dependents, US tax home

2. No US source income

3. Receiving private pension  from France  --- pension of US$50,000 from a French entity, with no US address.

4. Distribution amount 50,000, taxable amount 50,000,  "Taxable amount Not Determined " box  NOT CHECKED  

5.  The distribution  used "normal distribution -- code 7 ",    "IRA/SEP/SIMPLE" Box  NOT CHECKED

6. While filling out the 1099-R  entry box, used a EIN ( for the distributor ) of 23-1000000 , just to keep the system happy.   Used Foreign Address for the distributor.     I agree here that TurboTax should allow for a  "nil" EIN like 00-0000000 when foreign address  for the distributor is selected or some means of  disabling the error flag when "nil"  or NO EIN is selected  ( there needs to be a way to flag missed  EIN entry for domestic  case  vs. none/nil for foreign case ).

7.  The follow-on  screen did allow for entering details for 8938 entries  ( foreign trust/pension account ) and also check for  FBAR requirements.

 I don't know if this the way other tax software  handles the situation, but for my specific simulation, it worked well -- just a bit roundabout way.    Just note that pensions, whether domestic or foreign , still need  boxes  5a ( Gross distribution ) and 5b ( taxable amount )  to be filled  --- the whole process still needs to use the same process / treatment for both domestic and foreign sourced  pension.

Thus other than   a bit of issue with EIN handling and addressing issue, my simulation worked fine.

Is there more I can do for you ?

[rphdenis]

Not offended at all. I just wanted to make sure you understood that I knew exactly what type of pension I was talking about.

Thank you for taking the time to write an elaborate response on the subject. Unfortunately, a fake TIN on the substitute 1099-R does not cut it for me, nor for the IRS by the way - even if they accept the filing.

So it means that I will have no other option but to switch to another tax software that doesn’t have that issue and handles foreign employer work pension without having to create an unwanted 1099-R (which is strictly reserved for US retirement income), nor a fake TIN, which is undesirable to the IRS even if they don’t reject the filing.

Thanks again!