I am a US citizen currently working in S. Korea and have been enrolled in a defined contribution plan with my employer. If I end up quitting, the employer transfers the funds in the DC plan to an individual retirement account that I am required to open upon termination.
Is the annual employer contribution taxable even though I have not taken any distributions yet and are the accrued capital gains and dividends taxable when I take the distributions? (then I would need to amend previous tax returns)
If so, is the employer contribution excludable under the foreign earned income exclusion?
If not, am I required to report the employer contributions, gains, and dividends altogether and pay taxes on them upon termination--when the funds are transferred to an individual retirement account?
You'll need to sign in or create an account to connect with an expert.
If the DC is rolled into an IRA then you did not make a distribution so nothing is taxable. To make sure nothing is taxable when you leave then make sure it is a trustee to trustee conversion ... do NOT touch the money yourself.
Thank you so much for your answer.
I heard that foreign retirement accounts could be treated differently from US retirement accounts and that tax deferrals may not be available for foreign retirement plans. I hope that's not true..
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
TedCar
New Member
lac528
Level 2
jorge69ijk
Level 1
ray805
New Member
stevensmith173
New Member
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.