non US Citizen – inherited IRA

Submitted by ShipsnGiggles on Mon, 2016-10-24 16:24

What is the process to establish an inherited IRA for a non-US citizen (who was named as primary beneficiary on the deceased beneficiary form)?

How is the account registered w/o a SS#
How are distributions reported and taxed?

Thank you



Submitted by Bruce Steiner on Tue, 2016-10-25 23:15

  • Some custodians will want a taxpayer identification number.
  • If the beneficiary is a U.S. resident (for example, a green card holder), he/she is taxable in the same way as a U.S. citizen.
  • If the beneficiary is neither a U.S. citizen nor a U.S. resident, the custodian will withhold tax at 30%, or the rate under the applicable tax treaty, if any.  You should check to see if the beneficiary is entitled to any benefits under a treaty.
  • The more important issue may be whether the beneficiary’s home country provides similar tax treatment.  Some of the treaties provide that each country will treat IRAs in the other country in the same way as similar retirement benefits in their country.

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