Taxation of pension benefits paid to foreign professional athletes.

[CaliBen]

If a professional athlete - golfer or baseball player - receives pension benefits from the PGA or from MLB, are those benefits subject to United States income tax? If so, would only a portion of the benefits be taxable - the portion attributable to work performed in the United States? So for example if a MLB player from Japan plays for the Yankees, who travel to Toronto several times a year, is that portion exempt from U.S. taxation? Or a golfer from South Africa who plays tournaments all over the world - does he pay U.S. tax on his pension? Just on the portion attributable to service in the United States, or no U.S. tax at all?

Thanks

[Guest Harry O]

This is a complicated area. Depends whether there is a tax treaty and the athlete is eligible to claim benefits under the treaty. Depends on the form of payment from the plan. Depends on which years the benefits were earned in the US (the rules around apportioning income have changed over the years). I would think any athlete would be well-advised to pay good money for an experienced tax advisor.