Defined Benefit Contribution Calculation....

Apologies if this has been asked before, but does anyone know how to calculate the amount that needs to be included in US taxable income pursuant to a vested UK defined benefit plan?

I want to soak up my US FTCs and get basis in the UK pension when it finally gets paid many, many years down the road and after I have retired back to the USA.

Thanks!

You have two options when dealing with foreign pension contributions for US tax purposes; you can include them in your taxable income and pay the tax on them thus building up a US tax free basis or if a treaty allows it you can defer them from US taxation (up to the IRS limits) and pay the income tax when you take retirement income.

For defined contribution pensions the contribution amounts are obvious. With many defined benefit plans your employer will contribute a percentage of your salary and some may require you to also make a contribution. You need to find out those contribution amounts.

I thought that there was a formula in the regs somewhere that gives you the calculation. Are you familiar with that?

I thought that there was a formula in the regs somewhere that gives you the calculation. Are you familiar with that?

http://www.irs.gov/pub/irs-pdf/p939.pdf