IRA distribution to citizen of England

Technical topics regarding tax preparation.
#1
lucyko  
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933
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Orange County,CA
My client, who is a US citizen, recently passed away and left a $55,000 iRA to his sister who is a citizen/ resident of England.
How will the beneficiary be taxed on this inheritance in the US ? Will she have a 10 year distribution period ? Will taxes have to be withheld from the distribution ?
 

#2
Guya  
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859
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21-Apr-2014 8:08am
Location:
London, United Kingdom
England does not offer citizenship. None of the nations of the United Kingdom offer citizenship. One assumes that the sister is a non-resident alien, a citizen and resident of the United Kingdom.

Assuming you act for the beneficiary of your former client, the beneficiary has 2 choices. Complete distribution or periodic. Article 17(1) and 17(2) of the treaty explain the US tax position. Withholding - if any - is never a final tax. If periodic distributions are selected, one would want to advise the client on the UK tax position.
PS – Greeting from London, England. Grey and rainy ...
 


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