I lived in Switzerland for 7 years until I moved back to the U.S. in November 2024. I withdrew my Swiss 2nd pillar as a lump sum. I've found a lot of references explaining that the taxable portion of this withdrawal = total withdrawal - tax basis. Some advice suggests that the tax basis includes contributions to the 2nd pillar that I've already paid U.S. taxes on. I knew my annual contributions to the 2nd pillar were not deductible so I included them when I declared my full income for U.S. taxes in previous years. However, this was always below the threshold for the Foreign Earned Income Exclusion FEIE so I didn't actually pay any U.S. taxes on them. Can I use my contributions to my 2nd pillar as part of my tax basis, reducing the taxable amount of my 2nd pillar withdrawal? Or do I declare the whole amount withdrawn as taxable and just try to offset the taxes I already paid with the Foreign Tax Credit? Please help! I have 50 tabs open telling me different things.
