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About American IRA accounts and Japanese tax 2017/6/22 12:11
I'm a US citizen and a permanent resident in Japan, and I file both US and Japanese annual tax returns. I plan to retire in a few years, and I've got a few questions about some retirement money invested in both a traditional IRA account and a Roth IRA account in the USA.

Someday, after I've taken out that IRA money and dealt with the US tax paperwork (probably owing some US tax on the traditional IRA, and owing no US tax on the Roth), how will the two be treated for Japanese tax purposes?

I assume that for the Roth, I can subtract my principal (the cost basis) and simply report the capital gain, and then use so-called "separation taxation" (paying 15% Japanese national plus 5% local tax). Right? (And since there is no US tax paid on withdrawals from a Roth, I obviously cannot claim any foreign tax credit.)

For reporting the traditional IRA in Japan, can I also subtract my cost basis and just report the capital gain? Or do I need to report the ENTIRE amount withdrawn from the IRA, including principal, as taxable income in Japan?
Also, if anyone knows of a clear, concise and authoritative explanation about this somewhere online, either in English or in Japanese, I'd appreciate the link. I've searched and not yet come across anything.
by Ira (guest)  

Re: About American IRA accounts and Japanese tax 2017/6/23 02:51
Great question, but a (maybe not so short) trip to the tax office should give you a correct answer.
by Paul (guest) rate this post as useful

Re: About American IRA accounts and Japanese tax 2017/6/23 11:56
The Japanese tax office? I've been there. I've asked. The person listens politely, runs off, asks someone higher up and comes back, but cannot give me an answer regarding the Japanese tax treatment of an American IRA.

Also, they claim to have no printed documents with an explanation about the Japanese tax treatment of an IRA -- something I find hard to believe since there must be many Japanese citizens who have worked in the USA, contributed to an American IRA (and/or 401k), and returned to Japan in retirement.

If anyone either has an answer to my questions, perhaps from personal experience, or else knows of a clear, concise and authoritative explanation about this somewhere online, in English or in Japanese, I'd appreciate the link.

by Ira (guest) rate this post as useful

Re: About American IRA accounts and Japanese tax 2017/6/23 15:01
How did you claim the yearly contribution to IRA to JAPAN tax office every year ?
if you claimed that as 100% tax deductive item every year, you have to file all the amount, because your yearly contribution has not been taxed.
if you did not claim as tax deductive, you need to file only the amount increased.
by ken (guest) rate this post as useful

Re: About American IRA accounts and Japanese tax 2017/6/23 17:23
In those grey areas, where it isn`t written in English, and maybe even not in Japanese – (I have had two such situations), I simply asked the agent to write down his advice, attach his business card, and his seal. I filed this away with whatever materials I had taken to explain the situation, should I ever be questioned in the future.
by Paul (guest) rate this post as useful

Re: About American IRA accounts and Japanese tax 2017/6/23 20:00
Thanks, Ken.
Thanks, Paul.
by Ira (guest) rate this post as useful

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