Financial Advisory company in US closing wife's IRA Account

Finance, Taxes, Banking, Insurance and Retirement
1
Ok, so long story short, I met and married my wife in the US some years ago. While living there (her a green card holder at the time) we contributed to separate IRA retirement IRA accounts. Since living here since 2012 we have not contributed to these US IRA accounts but have a Swiss retirement thing paying into since about 10 years.

She got a letter a couple weeks ago that they need to close her IRA account in 2 months (so end of year at this point), because she is neither living in the US nor a Citizen and must pay her out. Apparently mine is OK as I'm a US Citizen. So, trying to find a way to get her money here with as little taxation as possible...

I understand that this money will most likely be taxed by the US as it deposited into the IRA as pretax income so since it's leaving the US, they'd want their 30%. I wish we could find another place in the US to put it so this doesn't happen until actual retirement. She's not self employed so no self-employed IRA/401 thingee.

So, trying to really see how to pay as little taxes as possible.

Since the money was earned pre- living here, wouldn't only interest since living here be taxable here in CH? Our Swiss tax guy was just dropped this bombshell of research today so we don't know how much help he can be as the Swiss do their pension stuff different.

Anyway, any ideas as to a good solution or tax advisor that has knowledge with these matters would be awesome. I'll also send out some feelers to some of the links in the tax forums here too.

Thanks in advance and be well citizens!

2
Why would any of it be taxable here, except as capital (which is around .1 per mill)

Tom

3
Consideration could be given to filing a 1040NR to reclaim part of the 30% IRA distribution withholding by the financial institution.

4
Can inquire here. But since the missis is not a US citizen it may be a no go.

https://www.sdfcu.org/

5
I can recommend USS Tax Advisors www.usstax.com . They aren't cheap, but they are very experienced with both the US and Swiss tax systems and the tax treaty. They will have seen this problem before and know what your options are. In particular, the new tax treaty acknowledges reciprocity between Swiss Pillar 3 accounts and US IRAs, so there might be a way to avoid early withdrawal penalties (and some taxation?) by converting directly between the 2 systems.

6
Ok, so an update.

Thanks for the suggestions guys. After searching for about a month we finally found someone. Charles Schwab.

• www.usstax.com never called us back.

• Fidelity wouldn't touch it as she's not a US resident/citizen but they suggested Fidelity International, they don't do IRA stuff, only bigger business

• Vanguard, pretty much hung up on us after an hour wait.

• The Fidelity rep did us a solid and emailed my wife personally and suggested a company called Moore Doeren Mayhew that does more US and Swiss business stuff but not IRA. It was them that suggested Charles Schwab International.

After calling them up and explaining we needed a "Trustee to Trustee Rollover for Non-Resident Alien " They were like No Prob! Just had some special paperwork to fill out. They actually said they were getting an influx of IRA account holders from our original IRA guys. And it technically stays in the US so none of this transferring between currencies stuff. Additionally, we could still be able to pay into the ROTH if we so chose to as that one's an after tax thing.

They are extremely friendly, open 24/7 and helped step-by-step to get the paperwork started. Because it's out of country, it's necessary to fill out and fax/mail the application, no online application understandably. One application per IRA type (Traditional/ROTH, etc). They said would take a couple of weeks and they foresee no problems as it's not their first pony ride. Note tho that they require a minimum 25K for each account that's to be transferred in. Also needed to provide Passport copy, some bill stubs like power, cable, etc.

We never did get a strait answer from the original company exactly why her account was being ended and not mine. The Schwab guy thinks it was probably some internal decision to not support non-citizen/residents due to reporting or something. Some portion of FACTA? Whatever. When her more pressing stuff is done Imma move my IRA to them too. F'm for the headache and sleepless nights they caused.

So a word of advice if my fellow reader is not a US Citizen, leaving the US and have an IRA, check with your institution if they will still support you. What was BS about this thing was we would still be his with a 10% penalty for taking it out before 59.5 Years of age. It's one thing if we requested the money personally like for an emergency or whatever, but when THEY ask you to close it then say "Oh, BTW, since you're taking the check there's 10% off the top for us." PBFFT Horse crap! Then the normal tax stuff, ya, taxed now or later.

So in the end will keep posted when all is said and done. Hopefully this little adventure can help someone else dodge a headache.

Thanks!