The facts:

Employee is a Canadian citizen and resident.
Employee works in Canada at an office that is owned by a US corporation.
Employee participates in the US corp.'s qualified retirement plan.
Employee receives an allocation of employer profit sharing contributions only.
Employee terminated employment with US corp.

Question:

Can this person establish an IRA in the US and roll in the vested retirement benefit?

Note:

I am not interested in the tax issues, I am trying to find out if this IRA can be established.

Any guidance/comments would be greatly appreciated.

Yes. This individual may establish an IRA to which the QP assets can be rolled over. Remember, any individual, US resident/citizen or not, may establish an IRA. The limitation is only the IRA contribution, i.e. the individual must have eligible compensation. This requirement does not apply to rollovers. The financial instituting should flag the IRA with the proper residency status, i.e. non-resident alien etc…

Thanks for the guidance.

If the employee workes in canada how were his contributions converted to us $ and is this permitted under canadian employment laws or foreign exchange laws. Secondly there may be a question of whether the rollover from the US plan is taxable under Candian income tax law. Employee will need US tax id to open IRA and provide satisfactory proof of identification under US anti terrorism legislation.

mbozek,

Thanks for your questions. I do not have all the facts (as is the case when most of the issues are posted). I really appreciate the input and look forward to getting to the bottom of this issue. Take care!