US Immigrant’s Residency Starting Date – The Devil’s Details – Too Many Days in the USA?

Part I of this blog post examined the importance of the Residency Starting Date (RSD) and how it applied under the Green Card Test. It also pointed out that traps for the unwary can destroy pre-immigration tax planning if one had not correctly nailed down the RSD. Today's post will examine the RSD rules that apply when … Continue reading US Immigrant’s Residency Starting Date – The Devil’s Details – Too Many Days in the USA? →

US Tax Filings by US Grantor of Foreign Trust

Today's post is a continuation of a series of blog posts dealing with foreign trusts A general overview of the US tax issues surrounding foreign trusts can be found here. When a US person is involved in any way with a foreign trust extra caution is required. Strict US tax filing responsibilities come into play … Continue reading US Tax Filings by US Grantor of Foreign Trust →

Americans Overseas: Timely Filing of Tax Returns and Other Documents With the IRS

Quite often, US taxpayers living in a foreign country are faced with tight deadlines for filing their paper tax returns. They are often confused as to how to send these physical documents to the Internal Revenue Service (IRS) and be considered to have sent them in a timely fashion when the foreign (i.e., non-US) post … Continue reading Americans Overseas: Timely Filing of Tax Returns and Other Documents With the IRS →

Exit Tax – A Comment on Richardson / Zelinsky Debate on Citizenship Based Taxation

Recently, a debate took place on the merits of the United States' income tax regime which is based on "citizenship". This lively debate was between the esteemed John Richardson (a US and Canadian attorney) and Professor Edward Zelinsky (a tax scholar and professor at Cardozo Law School in New York City). You can watch the … Continue reading Exit Tax – A Comment on Richardson / Zelinsky Debate on Citizenship Based Taxation →

OOOPS! I Created a “Foreign” Trust

My earlier blog post set out the tax problems that arise when one has created a "foreign" trust with US beneficiaries. This post will probe the factors used to determine whether a trust is a US trust or a “foreign” trust. It will also point out a possible pitfall for many families who have members … Continue reading OOOPS! I Created a “Foreign” Trust →

It’s About Time! Clearer Tax Guidance for Cryptocurrency…. on the Way

Internal Revenue Service (IRS) commissioner Charles Rettig announced that the IRS plans to issue further guidance on the taxation of cryptocurrency. Commissioner Retting wrote that “We have been considering these issues and intend to publish guidance addressing these and other issues soon.” Can it be? Is an "IRS rescue" really on the way? Will it … Continue reading It’s About Time! Clearer Tax Guidance for Cryptocurrency…. on the Way →

Outrunning (and Outwitting) the IRS Using the Statute of Limitations

With tax returns either filed, in progress for Americans abroad, put on extension... (or late because an extension was not properly filed), now is a good time to look at the various statutes of limitations (SOL) applicable to US tax matters. What is a tax SOL? Simply, the SOL prescribes the length of time permitted … Continue reading Outrunning (and Outwitting) the IRS Using the Statute of Limitations →

Should A Green Card Holder Use the Foreign Earned Income Exclusion?

This is actually a difficult question to answer, despite the fact that many green card holders give little thought to the issue and willy-nilly claim the exclusion. Let's look at some background. Americans working abroad may be eligible to exclude from US taxable income certain foreign earned income (wages, compensation for services) under the rules … Continue reading Should A Green Card Holder Use the Foreign Earned Income Exclusion? →

What is a “Bona Fide Resident” for FEIE?

The case of Hudson v. Commissioner, T.C. Memo. 2017-221 provides a valuable lesson from the US Tax Court on what it means to be a "bona fide resident" for purposes of the Section 911 foreign earned income exclusion (“FEIE”). The court in Hudson held that a pilot working for Korean Air and living in a … Continue reading What is a “Bona Fide Resident” for FEIE? →

Foreign Earned Income Exclusion: What is “Earned Income”?

Americans working abroad may be eligible to exclude certain foreign earned income (wages, compensation for services) from US taxable income under the rules governing the Foreign Earned Income Exclusion (FEIE). The FEIE amount is adjusted annually for inflation. The amount for 2018 is US$104,100 per individual; for 2019 the amount is US$105,900 per individual. In … Continue reading Foreign Earned Income Exclusion: What is “Earned Income”? →