Retirement lump sum payout - what tax year to be reported?

[nbtax01]

I have used a financial organization in South Africa to manage the lump sum payout in South Africa. The payout and South African taxes were paid out in December 2023, but it was in an account that I did not have access to (except for balance). The payout and incurred costs for the financial organization occurred in February 2024 only. The funds were transferred to my US bank account only in February 2024. Do I report the lump sum pay out in 2023 or 2024 IRS tax year in the USA? 

[JotikaT2 · Accepted solution]

Since you did not have access to the funds until they were distributed in 2024 and tax returns are typically filed based upon a cash basis, any taxable pension distributions will be reported and taxed on your 2024 income tax return.

Please see this link for specifics on the tax treaty between the USA and South Africa.  Section 18 outlines how pensions from South Africa might be treated on a US return depending upon when the pension was earned as well as the length of service before the distribution took place.

[nbtax01]

Fantastic and thanks for the clear answer. It is clear that I can file the lump sum retirement annuity income in US tax year for 2024 then. Please allow me a follow up question: 
The 'temporary or transfer" bank account in South Africa was in my name even though I did not have access to the funds in 2023. The financial institution transferred the money after South African tax, including interest earned and after they deducted their fees in 2024 to my US bank account. So, the question is: Do I declare the value of the temporary bank account in South Africa under the Foreign Bank accounts over $10,000 including any interest that was earned in 2023? Or do I just cover all income including the interest when they transferred it to my US Bank Account in 2024 and thus don't mention the temporary/transfer bank account at all in 2023?