hTTi

Thanks Panda, looks like my mind was not following the stuff.

It sounds crazy that just having them with no dividends being distributed/collected would trigger paying taxes on unrealized gain.
What would happen with people that have 401Ks and now live in Germany? They are not contributing to the plan, just have it sitting there, would they have to pay taxes on the rise of the value before they start getting money from it?

Nixon wrote: ↑Tue May 27, 2025 12:46 pm It sounds crazy that just having them with no dividends being distributed/collected would trigger paying taxes on unrealized gain.
What would happen with people that have 401Ks and now live in Germany? They are not contributing to the plan, just have it sitting there, would they have to pay taxes on the rise of the value before they start getting money from it?

No, since US pension plans like 401k, IRA and Roth-IRA are privileged by article 18A (1) of the double taxation agreement between Germany and the USA, in that you only have to tax them when you withdraw from them: http://www.pinkernell.de/dbausa.htm#Art18A

• Article 18A
  Pension Plans
  
  1. Where an individual who is a resident of a Contracting State is a member or beneficiary of, or participant in, a pension plan established in the other Contracting State, income earned by the pension plan may be taxed as income of that individual only when, and, to the extent that, it is paid to, or for the benefit of, that individual from the pension plan (and not transferred to another pension plan in that other Contracting State).

Thank you for clarifying it.