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International Tax

Foreign Nationals and U.S. Income Tax and Disclosures: When Is Reporting Required?

Posted on 02/07/17 by Renea M. Glendinning, CPA

Each year, millions of foreign nationals visit the U.S.  Many of them come for a holiday and do not stay a sufficient amount of time in the U.S. to require them to file anything with the Internal Revenue Service (IRS), the U.S. government agency responsible for the tax collection and tax law enforcement.  However, foreign

Foreign Nationals and U.S. Estate Tax

Posted on 01/19/17 by Renea M. Glendinning, CPA

Many foreign nationals own U.S. real estate and hold title in their individual names. They are often surprised to learn that if they still own the property at the time of their death, U.S. estate tax could be payable. The tax laws with respect to U.S. estate taxation of U.S. citizens and domiciliaries differ significantly

Foreign Nationals and Like-Kind Exchanges

Posted on 01/18/17 by Renea M. Glendinning, CPA

Under the provisions of Code Section 1031, a taxpayer may sell U.S. real estate at a profit and defer paying tax on that profit by replacing it with the purchase of another property. There are specific provisions which must be met in order for the transaction to qualify for tax-deferred treatment that are beyond the

Foreign Nationals and U.S. Gift Tax Consequences of Executing Certain Real Property Deeds

Posted on 01/18/17 by Renea M. Glendinning CPA

There are many ways in which foreign nationals can hold title to U.S. real estate. Title may be held through various entities (i.e., corporations, partnerships, limited liability companies, trusts) or can be held in an individual’s personal name or held jointly with others. Each form of ownership is subject to specific rules of U.S. income

IRS Announces Expiration of ITINs

Posted on 10/15/16 by Renea M. Glendinning

Since the program began in 1996, a substantial number of Individual Taxpayer Identification Numbers (ITINs) have been issued to nonresident aliens who were not eligible to obtain U.S. social security numbers.  An ITIN must be obtained for the purpose of reporting certain transactions by nonresident aliens that are subject to U.S. income taxation.  These transactions

Nonresident Options for Unreported Rental Income of U.S. Real Estate

Posted on 08/27/16 by Ann Harman

A nonresident renting U.S. real estate has two options as to how this activity will be taxed at the federal level.  Oftentimes, a nonresident does not become aware of these requirements until the year that the property is sold.  At that point, there is no good solution to becoming compliant.  While there are alternatives available,

Are You Reporting Foreign Income and Assets?

Posted on 07/26/16 by Phoebe Trumpler

If you are a United States citizen or tax resident living in the U.S. or abroad, you are required to file a U.S. income tax return to report to the IRS any income that you earn or receive from both inside and outside of the United States.  This includes but is not limited to wages,

Frequently Asked Questions Regarding Withholding Requirements Under the Foreign Investment in Real Property Tax Act

Posted on 02/02/16 by Renea M. Glendinning

Previous to the enactment of the Foreign Investment in Real Property Tax Act (FIRPTA) in 1980, foreign sellers of U.S. real estate were not taxed on the capital gains realized on the sale of real estate situated in the U.S., unless such real estate was used in a U.S. trade or business.  Under FIRPTA, foreign

Limited Liability Companies and FIRPTA

Posted on 02/02/16 by Renea M. Glendinning

The Foreign Investment in Real Property Tax Act, known as FIRPTA, subjects a foreign seller of US real estate to a withholding of 15% of the gross sales price.  This withholding is deducted from the net proceeds due to the seller and is required to be remitted to the Internal Revenue Service (IRS) no later

Short Sales and FIRPTA Withholding

Posted on 02/02/16 by Renea M. Glendinning

For many property owners, the mortgage balance owed on their property exceeds its value.  Many of these property owners cannot afford to continue making the mortgage payments. In order to avoid foreclosure, lenders have approved sales of properties for a price that is less than the outstanding mortgage balance. This is referred to as a

U.S. Gift Taxation of Nonresident Aliens

Posted on 02/02/16 by Renea M. Glendinning

U.S. gift tax can apply to nonresident aliens under certain circumstances.  Gifts of tangible personal property and real property by nonresident aliens are subject to gift tax only if the property is located in the United States.  Gifts of U.S. intangible property by nonresident aliens are not subject to gift tax. Nonresident aliens receive a

U.S. Income Tax Reporting on Rental Income for Nonresidents

Posted on 02/02/16 by Renea M. Glendinning

When a nonresident individual owns rental real estate in the U.S., there are two alternatives for reporting and paying U.S. income taxes. The individual may choose to not file an income tax return in the U.S. to report the rental income.  In this case, 30% of the gross rental income must be remitted to the

U.S. Tax Rules Relating to Foreign Nationals Investing in U.S. Real Estate

Posted on 02/02/16 by Renea M. Glendinning

The rules regarding the U.S. income and estate taxation of foreign nationals are very different from those that apply to U.S. citizens and residents.  It is important that foreign nationals understand the potential U.S. tax implications of investing in U.S. real estate that are applicable to them. The first thing that must be determined is

United States Estate Tax and Residents of the United Kingdom

Posted on 02/02/16 by Renea M. Glendinning

Many residents of the United Kingdom own property in Florida and in other parts of the United States.  In the years past, the U.S. estate tax obligation on U.K. residents who died while owning property in the U.S. titled in their personal names could be quite significant.  Recent changes in the U.S. estate tax laws

FIRPTA Withholding Increases in 2016

Posted on 01/21/16 by David Cumberland

On December 18, 2015, Congress passed and President Obama signed into law, the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), which contains changes to the Internal Revenue Code section dealing with withholding of tax on the sale of U.S. real estate.  Under the Foreign Investment in Real Property Tax Act of 1980,commonly known

Foreign Nationals and FIRPTA

Posted on 01/21/16 by Renea M. Glendinning

When a foreign person sells U.S. real estate, he or she is subject to having 15% of the gross sales price withheld from the proceeds received at closing.  This is a requirement under the Foreign Investment in Real Property Tax Act, known as FIRPTA.  This 15% withholding must be remitted to the Internal Revenue Service

U.S. Estate Tax and Cross-Border Benefits for Canadians

Posted on 01/21/16 by Renea M. Glendinning

The American Taxpayer Relief Act of 2012 was passed in January 2013 and granted U.S. citizens and domiciliaries an exemption of $5,250,000 with respect to U.S. estate tax for decedents dying in 2013.  Persons subject to the U.S. estate tax on the value of their worldwide assets do not pay U.S. estate tax unless the

What Every Canadian Should Know Before Moving to the U.S.

Posted on 01/21/16 by Renea M. Glendinning

Each year, many Canadians relocate their place of residence by immigrating to the U.S.  By doing so, they become subject to the U.S. tax laws with respect to taxation of income applicable to tax residents.  It is important that these new immigrants understand the obligations associated with U.S. income tax reporting and disclosure requirements. U.S.

Are You a U.S. Income Tax Resident and Don’t Know It?

Posted on 12/07/15 by Renea M. Glendinning

You can be taxed for U.S. income tax purposes either as a resident or as a nonresident.  Residents are required to report their worldwide income to the U.S. taxing authorities.  Nonresidents are required to report only income arising from U.S. sources. There are several ways you can be treated as a resident for U.S. income

Alternatives for Nonresidents to Consider in Taking Title to U.S. Real Estate

Posted on 03/19/15 by Renea M. Glendinning

Before a nonresident purchases U.S. real estate, careful consideration should be given to the best way to take title from a U.S. income and estate (inheritance) tax perspective, taking into account the nonresident’s specific circumstances.  This article will illustrate some of the U.S. tax advantages and disadvantages of some of the most commonly-used alternatives of

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