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    j_One_kRuZ's Avatar
    j_One_kRuZ Posts: 3, Reputation: 1
    New Member
     
    #1

    Apr 8, 2011, 07:19 AM
    How do you treat a foreign company's pension builder for US tax purposes?
    Hello, I appreciate all the clarifying answers I can get.
    Back in 2000 I started contributing to a Foreign
    Insurance Company to their so called Pension Builder.
    This the Philamlife Insurance Company Pension Builder
    in the Philippines. I was contributing about $600.00 (32k pesos)
    yearly and after 10 years it reached maturity and I just
    got my first distribution of $1100.00 (50k pesos) last year
    Dec 2010. The account itself supposedly has a face value
    of roughly $10k-11k (500k pesos).

    Now how do I report the distribution in my 2010 Income tax.

    1) Report the interest of $500 in schedule B?
    2) Report this as Pension or Annuity Income?

    The bottom line is I am not sure. I am also confused on
    how to classify this type of Account, whether this
    some sort of deferred annuity or just a high interest
    savings account?

    Thanks for all the help.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,757, Reputation: 846
    Senior Tax Expert
     
    #2

    Apr 8, 2011, 10:25 AM
    I do not think it is a pension distribution. The distribution would be considered either interest or dividends, plus perhaps a partial repayment of principal which is NOT axable.

    You need to get the company to identify what the distribution was for tax purposes and how much was a repayment of principal. Otherwise, you MAY have to claim it ALL as dividends.
    j_One_kRuZ's Avatar
    j_One_kRuZ Posts: 3, Reputation: 1
    New Member
     
    #3

    Apr 12, 2011, 08:49 PM
    Hello. Thanks for a response. I did contact the Philamlife and they told me that is
    some form of pension benefit doubling as a Life Insurance with a cash surrender
    value of around 360k Pesos ($8732) currently. Also I did some researching and
    it seems that the account takes the form of some kind of Fixed Annuity Insurance.
    For my part I will be using the IRS General Rule for computing taxes for non-qualified
    Pensions or Annuities for this Foreign Fixed Annuity plan. Further research tells me
    that foreign annuity plans are not tax-deferred therefore I am exempt from the 10%
    tax penalty for pension annuity distributions withdrawn before age 59. And then
    this thing opens up a can of worms regarding taxes on the earnings per year
    ever since I started this account back in 2000. Also there is the issue of
    FBAR filing of Life Insurance with Cash Value just recently put out by
    FinCen. I am not really sure if I I have to file this form to the Treasury
    with cash value is below $10k.
    j_One_kRuZ's Avatar
    j_One_kRuZ Posts: 3, Reputation: 1
    New Member
     
    #4

    Apr 12, 2011, 08:55 PM
    Comment on AtlantaTaxExpert's post
    Thanks for the response. See my Answer below.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,757, Reputation: 846
    Senior Tax Expert
     
    #5

    Apr 13, 2011, 10:48 AM
    In my opinion, the $10,000 threshold applies for the Life Insurance with cash value, so no FBAR is necessary.

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