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The professionals at Advanced Underwriting Consultants (AUC) answer the tax and technical questions posed by producers. Here’s the question of the day.
Question: May money may be moved tax-free from a U.S.-based IRA to a foreign retirement plan? May money be transferred from a foreign retirement plan into a U.S. IRA?
U.S. tax rules dictate the kinds of accounts that can transfer money to an IRA. All such accounts are U.S.-based retirement accounts. No foreign accounts qualify under the rules. Therefore, money from a foreign retirement plan may not be rolled into a U.S. IRA.
Similarly, the rules limit the kinds of accounts that qualify for tax-free rollover from an IRA. Foreign accounts are not included in the rules, so moving money from a U.S. IRA to a foreign retirement plan would not be a tax-free rollover.
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