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International Tax

Non-Resident Alien and Non-Citizen Services

How to Determine U.S. Income Tax Status and Why It Matters

Posted on 03/09/20 by Renea M. Glendinning, CPA

For U.S. income tax purposes, individuals are classified as either residents or nonresidents.  There are very specific tax laws that determine an individual’s tax status for U.S. income tax purposes.  An individual can be classified as a resident for U.S. income tax purposes under several different circumstances.  Unlike most other countries of the world, the

Sale of U.S. Real Estate by Foreign National after Death of Joint Owner

Posted on 01/27/20 by Renea M. Glendinning, CPA

Many foreign nationals own U.S. real estate and hold title in their individual names.  If title is held by husband and wife, it is typically held with right of survivorship.  This means if one person on title dies, the other joint owner becomes the sole owner of the property by operation of law.  Since the

U.S. Estate Tax and Residents of Germany

Posted on 01/02/20 by Renea M. Glendinning

Effective January 1, 2018, the Tax Cuts and Jobs Act granted U.S. citizens and domiciliaries an exemption of $11,180,000 with respect to U.S. estate tax for decedents dying in 2018. In 2020, the exemption was increased to $11,580,00. This means that individuals subject to the U.S. estate tax on the value of their worldwide assets

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

Posted on 01/02/20 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

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

Posted on 01/02/20 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

IRS Announces Expiration of ITINs

Posted on 01/02/20 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

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

Posted on 01/02/20 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

U.S. Gift Taxation of Nonresident Aliens

Posted on 01/02/20 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

Foreign Nationals and U.S. Estate Tax

Posted on 01/02/20 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

United States Estate Tax and Residents of the United Kingdom

Posted on 01/02/20 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

Foreign Nationals and Like-Kind Exchanges

Posted on 09/05/19 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 09/05/19 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

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

Posted on 09/05/19 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 FIRPTA

Posted on 09/05/19 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

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

Posted on 09/05/19 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 09/05/19 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 09/05/19 by Renea M. Glendinning

For some 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. Income Tax Reporting on Rental Income for Nonresidents

Posted on 09/05/19 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 09/05/19 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

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

Posted on 09/05/19 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.

U.S. Resident and U.S. Citizen Services

How Will my U.S. Tax Reporting Change If I Become a U.S. Tax Resident?

Posted on 05/29/20

In our work with international tax clients at Kerkering Barberio, we often talk with people who did or perhaps still live in another country. They have homes and families and careers outside the U.S. and maybe a business. They probably have foreign bank accounts, financial investments, and pension plans. The question we are often asked

Voluntary Offshore Compliance Programs for U.S. Taxpayers

Posted on 05/29/20 by Phoebe Trumpler

Whether living in the U.S. or abroad, U.S. citizens, permanent residents and Expats are required to file a U.S. income tax return to report world-wide income. Furthermore, the value of and information on non-U.S. financial assets must be reported. Failure to pay U.S. income tax liabilities and file the proper forms may result in civil

Reporting Non-U.S. Income and Financial Assets

Posted on 05/29/20 by Phoebe Trumpler

Whether you are living in the U.S. or abroad, if you are a U.S. citizen, permanent resident or an Expat, you are required to file a U.S. income tax return and informational disclosures to report world-wide income and your non-U.S. financial assets. U.S. citizens who have dual citizenship or who are so-called accidental U.S. citizens

Navigating the perilous waters of cryptocurrency reporting

Posted on 05/06/20 by Annamaria Kiss

As the initial surprise over the sudden emergence of virtual currencies winds down and Bitcoin is looking at its 10th birthday in the rearview mirror, we stop to take a look at the early history of cryptocurrency tax reporting. In this article, we will explore the beginnings of cryptocurrency reporting on Form 1040 and various other

Tax Perspective for the Virtual Currency Enthusiast

Posted on 05/05/20 by Annamaria Kiss

Have you been searching for a comprehensive summary of all the recent and not so recent IRS actions regarding virtual currencies? You have arrived! But before we begin, if you are interested in some background on the early days of cryptocurrency reporting, visit my previous article, Navigating the Perilous Waters of Cryptocurrency Reporting. Cryptocurrencies have

IRS Form 5471: What U.S. Taxpayers Should Know About Foreign Corporation Reporting

Posted on 04/09/20 by Annamaria Kiss

Reporting of an ownership interest in a foreign corporation can prove to be a difficult hurdle for U.S. taxpayers to tackle. Various factors need to be considered when determining which IRS forms and schedules are appropriate for a given U.S. shareholder’s unique circumstances. Some of these factors include: The ownership percentage in the foreign corporation

Helping Hungarians with FATCA Disclosures

Posted on 02/27/20 by Annamaria Kiss

Hungary was the first country in the central European region to join forces with the United States to implement the Foreign Account Tax Compliance Act, also known as FATCA. The agreement between the Hungarian and the U.S. government sets out to achieve bilateral reporting of foreign financial accounts, such as bank accounts, as of January

So, you want to move to Hungary?

Posted on 02/27/20 by Annamaria Kiss

Have you received an offer for a foreign work assignment in Hungary? Did your parents or grandparents hail from Hungary and you always wondered about reconnecting with your roots? Are you contemplating spending your retirement years in Hungary where your money can stretch further? If you answered yes to any of these questions, this article

Foreign Pension Plans

Posted on 01/14/20 by Phoebe Trumpler, CPA

Have you or your spouse ever worked outside the U.S.? If you or your spouse have ever worked outside the U.S., you may have an employer pension or a retirement or private savings plan in another country (pensions or plans). Unfortunately, for the U.S. taxpayer, a pension or plan in another country will not have

Is Your Next Business Opportunity Outside the U.S.?

Posted on 09/16/19 by Phoebe Trumpler, CPA

Expanding a U.S. business internationally is complicated, and it has become even more so, under the Foreign Account Tax Compliance Act (FATCA) and the Tax Cuts and Job Act (TCJA). Whether you are considering your first business overseas or thinking about expanding an operation you already have, you need specialized knowledge to arrive at the

Are you a U.S. Citizen or U.S. Resident investing abroad? You may need to re-evaluate your investment strategy.

Posted on 02/05/19 by Phoebe Trumpler, CPA

Investing Abroad is Complicated for U.S. Tax Purposes U.S. Citizens including U.S. Expatriates (expats) and U.S. Permanent Residents need to be aware of the U.S. tax ramifications of investing in non-U.S. mutual-type funds abroad, and seriously consider avoiding these investments. By understanding the tax and reporting cost issues associated with these investments, referred to as

The New Deduction for Foreign Derived Intangible Income

Posted on 08/08/18 by Christina Greenstein, CPA

Background The 2017 Tax Cuts & Jobs Act made many fundamental changes in the area of International Taxation. One of the international provisions, Sec. 250, provides for a reduced rate of tax on sales of products and services to foreign customers of U.S. domestic corporations. Known as the Foreign Derived Intangible Income deduction, or FDII deduction,

Global Intangible Low-Tax Income

Posted on 08/08/18 by Chris Corneroli, CPA

In an effort to minimize the shifting of corporate profits to low-tax countries, the Tax Cuts and Jobs Act of 2017 (TJCA) introduced a new category of foreign income called the “global intangible low-tax income”, or GILTI. GILTI is essentially a minimum tax on foreign earnings that applies to all U.S. shareholders – individuals who

Living and working abroad requires special attention at tax time

Posted on 03/14/18 by Phoebe Trumpler, CPA

If you are a U.S. citizen or U.S. permanent resident living abroad (the Expatriate or Expat), you have several tax opportunities to be aware of. While you will be taxed on your worldwide income, you may be able to exclude up to $105,900 (for 2019) of your foreign wages or self-employment net income from your

What does the Tax Cuts and Jobs Act mean to international tax filers?

Posted on 02/21/18 by Phoebe Trumpler, CPA

The Tax Cuts and Jobs Act (TCJA) of 2017 brings about changes to many fundamental aspects of US international taxation, some of which could present significant additional burdens to US taxpayers including U.S. Expatriates (Expats). The following is a brief overview of some of the changes to be aware of when dealing with international tax

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