Timing Considerations for Expatriation, Tax Compliance and Form 8854

I invite readers to enjoy my article, copied below, recently published by Bloomberg Tax in the Daily Tax Report.  Reproduced with permission. Published January 7, 2022. The Bureau of National Affairs, Inc. (800-372-1033) http://www.bloombergindustry.com It is online here.   My blog post today contains additional input with a link to a podcast on this topic with US … Continue reading Timing Considerations for Expatriation, Tax Compliance and Form 8854

Covered Expatriates, Exit Tax and the Principal Residence

My earlier blog post discussed the rules that apply to a US taxpayer who sells his personal residence, whether located abroad or in the US. If the home qualifies as the “principal residence” and other requirements are satisfied the taxpayer may exclude up to US$250,000 ($500,000 for joint returns) of taxable gain from income.  As … Continue reading Covered Expatriates, Exit Tax and the Principal Residence

Crypto – Harvest Your Tax Losses / Use Offsetting Positions While You Can – Deadline 12/31

The House Ways and Means Committee tax proposal unveiled last month has two provisions to shutter lucrative crypto tax loopholes.  These are the subject of today’s blog post: the “wash sale” rules and the “constructive sale” rules, both contained in the Internal Revenue Code at Sections 1091 and 1259, respectively. First let’s discuss the so-called … Continue reading Crypto – Harvest Your Tax Losses / Use Offsetting Positions While You Can – Deadline 12/31

Is There Really a “Solution” for Crypto Tax Noncompliance?

Now that the US Congress and the Internal Revenue Service (IRS) have digital asset transactions firmly in the crosshairs for investigations and reporting, we are in the midst of what I will call crypto-currency tax anxiety.  Millennials may make up a larger group of persons dealing with crypto, and may be very concerned about prior … Continue reading Is There Really a “Solution” for Crypto Tax Noncompliance?

Renouncing One’s US Citizenship: More Audits, Virtual Currency, CLN & Travel

COVID-19 restrictions have severely limited services at US embassies and consulates around the world. As a result, renouncing one’s US citizenship has become very difficult, and in many cases, just about impossible at the current time. This gives individuals more time to make sure they have properly planned for expatriation. It's a big step. I … Continue reading Renouncing One’s US Citizenship: More Audits, Virtual Currency, CLN & Travel

Third Party Reporting of Virtual Currency: Who’s Telling the IRS What?

Many of my readers are aware that I have written various blog posts about the US tax issues that surround virtual currency. Some have asked, (perhaps innocently, perhaps not), about so-called “third party reporting” of virtual currency to the Internal Revenue Service (IRS) .  For those who do not know what this means – it’s … Continue reading Third Party Reporting of Virtual Currency: Who’s Telling the IRS What?

Virtual Currency:  IRS Sheds More Light for 2020 Tax Returns

The US Internal Revenue Service (IRS) released instructions to the draft 2020 Form 1040 on Oct 23rd.   It may be recalled that a virtual currency question was introduced for the first time on the 2019 Form 1040 on Schedule 1. Not all taxpayers are required to complete Schedule 1. Now, the 2020 Form 1040 places the question … Continue reading Virtual Currency:  IRS Sheds More Light for 2020 Tax Returns

IRS Stealth: Delinquent Information Submission Procedure Penalties May Apply Without Considering “Reasonable Cause” Statement

On November 5, the Internal Revenue Service (IRS) made life more difficult for taxpayers who may have missed some foreign information return filings.  The IRS quietly revised one of the four options to correct for missing information returns with respect to a US taxpayer’s interest in any offshore/foreign assets and holdings (e.g., Form 8938, Form … Continue reading IRS Stealth: Delinquent Information Submission Procedure Penalties May Apply Without Considering “Reasonable Cause” Statement

IRS Needs Money: NRA’s Owning US Real Estate Will Help the Agency Get it Via Taxes and Penalties

Foreign investment in the US real property market is big business. US property sales to foreign buyers in 2019 totaled US$78 billion.  A look at statistics from more recent years shows that the largest share of foreign residential investors are from China and Canada, followed by Mexico.  The US tax laws apply to foreigners owning … Continue reading IRS Needs Money: NRA’s Owning US Real Estate Will Help the Agency Get it Via Taxes and Penalties

Foreign Trust Forms 3520 and 3520-A Penalties: A Potential Gold Mine for the IRS

The Internal Revenue Service (IRS) is looking for money.  As part of the hunt, it has instituted various “campaigns” (full list here) aimed at areas in which there is greater taxpayer noncompliance that may involve significant tax dollars and penalties. One such campaign involves the failure by a US person to file complex information-reporting tax … Continue reading Foreign Trust Forms 3520 and 3520-A Penalties: A Potential Gold Mine for the IRS