@Marsha2020What is the technical basis for using year-end rate for conversion?

@aytaxservicesForeign pension is generally taxable as annuities and would be reportable on Lines 4c and 4d.  It is a requirement to use spot rate on the date of receipt for conversion.

Review Article 18 of the US-Italy DTA.  Italy has the right to tax the lump sum distribution under Article 18(3), which is subject to the Saving Clause.  You will need to find out why no Italian tax was withheld - perhaps it is to be settled separately on a return to be filed - as you will need that info for FTC.  Article 18(6) is excepted from the Saving Clause, which means your client may or may not have a basis in the distribution.  You will need to review his prior year returns to establish the position taken and compute the amount taxable.