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
Often, persons living abroad are asked to help care for an elderly parent who lives in the USA. Similar situations can arise for other family members, some of whom may be US citizens living outside of America, but who need assistance due to age or health-related issues. Quite often the care required is simply a … Continue reading A No-Go — Foreign Trust with A US Beneficiary
Tune in to the amazing debate between John Richardson and Edward Zelinsky, two renowned tax and citizenship professionals, taking place on Friday May 17. Not only is it free, but viewers will receive an unparalleled education about the major issues surrounding US citizenship, its tax consequences for the typical American abroad and Accidental Americans, effects … Continue reading US Citizenship And Worldwide Taxation: Justified?
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
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?
Recently, I blogged about the fact that many US persons living abroad have “foreign” (non-US) life, sickness or accident insurance or a foreign annuity. A mere handful have any knowledge of the complex US tax rules that may apply to these policies. Buzz words include “passive foreign investment company” (PFIC) exposure, Form 114 Bank Secrecy … Continue reading Foreign Life Insurance Policy? Houston, We Have a Problem……
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?
Effective as of May 13, taxpayers can no longer request an employer identification number (EIN) unless the "responsible party" named on the application has either a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). Only governmental entities and the military are exempt from this requirement, and may continue to list non-individual entities as … Continue reading Head’s Up! IRS Just Revised EIN Application Procedure & Foreign Taxpayers Will Struggle
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”?
I will be posting here a series of eight related videos which discuss the premise that the United States is imposing a separate and more punitive tax system on U.S. dual citizens who live in (and are tax residents of) other countries. The videos were motivated by recent posts by Toronto lawyer John Richardson and … Continue reading Americans Abroad: Separate But (Not) Equal