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Hello, new here and I really need help in determining a pension account
that I enrolled in the Philippines 10 years ago for US Tax purposes.
was used to be a subsidiary of AIG. Anyways I contributed Php32,500
pesos (Philippine Pesos) per year for 10 years for a total Net Cost of
Php325,000 pesos. After the 10 years I am suppose to get an annual
benefit of Php50,000 per year (every November) for the next 5 years
(this is supposedly 20% of the Face Amount of the Policy which
is Php250,000 pesos) and on the 6th year I get Php250,000 pesos
or 100% of the Face Amount. Now this Policy or Account doubles up
also as some kind of insurance based on the Cash Value of the account.
What I am confused about is how to classify this Account for US Tax purposes.
Is this an Annuity (non-qualified), or a Pension (whose treatment is the same
as an Annuity), Some kind of non-standard Fixed Annuity? or maybe NOT
and it has to be treated differently other than an Annuity for US Tax purposes?
If I treat this as an Annuity for US Tax purposes I know I have to use the complicated
'General Rule' based on Publication 939. But if you read through you will be
inundated with stuff like the 'Refund Feature', Expected Return, 'Exclusion Ratio'
and numerous tables for your calculations. It will make your head spin. Lol.
For my part I used after-tax dollars to fund this and I would think that I would only
be taxed from the earnings that accumulated. Is anybody here an expert in
this matter. Any help will be appreciated.
that I enrolled in the Philippines 10 years ago for US Tax purposes.
was used to be a subsidiary of AIG. Anyways I contributed Php32,500
pesos (Philippine Pesos) per year for 10 years for a total Net Cost of
Php325,000 pesos. After the 10 years I am suppose to get an annual
benefit of Php50,000 per year (every November) for the next 5 years
(this is supposedly 20% of the Face Amount of the Policy which
is Php250,000 pesos) and on the 6th year I get Php250,000 pesos
or 100% of the Face Amount. Now this Policy or Account doubles up
also as some kind of insurance based on the Cash Value of the account.
What I am confused about is how to classify this Account for US Tax purposes.
Is this an Annuity (non-qualified), or a Pension (whose treatment is the same
as an Annuity), Some kind of non-standard Fixed Annuity? or maybe NOT
and it has to be treated differently other than an Annuity for US Tax purposes?
If I treat this as an Annuity for US Tax purposes I know I have to use the complicated
'General Rule' based on Publication 939. But if you read through you will be
inundated with stuff like the 'Refund Feature', Expected Return, 'Exclusion Ratio'
and numerous tables for your calculations. It will make your head spin. Lol.
For my part I used after-tax dollars to fund this and I would think that I would only
be taxed from the earnings that accumulated. Is anybody here an expert in
this matter. Any help will be appreciated.
