These are frequently asked questions on the topic of the IC-DISC and United States Exporting of Computer Software, Internet Sales and Licenses as a major tax savings tool. We thank our member Richard Lehman for his expertise and answers to these often asked questions.
Will a customer of company that is exporting through a DISC know that there is a DISC involved in the transaction?
Answer: The existence of the DISC will be transparent to the export company’s customers. The exporter will continue to operate its business in the same manner and its employees will continue to perform the company’s manufacturing, sales, billing, shipping and collection functions. The fact that there is a commission agreement between the exporter and the DISC will not have to be disclosed to the exporter’s customers and no documentation provided to the customers will need to indicate the existence of or services deemed provided by the DISC.
The boom in U.S. real estate caused by foreign investors is about to get bigger as a result of greatly reduced U.S. income taxes for nonresident aliens and foreign corporations.
Because of the new 2017 Tax Act, foreign investors could receive a 40% reduction in the U.S. income tax of their gains and income from their real estate investments. For those foreign investors who already were invested in U.S. real estate, their after-tax returns could now be 40% more valuable without their raising a finger. Read More
This webinar will provide tax counsel and advisers with a comprehensive guide to the tax and investment planning challenges and opportunities for high net worth foreign clients seeking to immigrate to the United States. The panel will discuss strategies for minimizing the U.S. tax impact of foreign-source ordinary and capital income prior to establishing tax residency in the U.S., detail the EB-5 program for nonresidents seeking to establish permanent residency through investment in the U.S. economy, and outline the tax issues that can arise from participating in a regional center. Read More
The boom in United States real estate caused by foreign investors is about to get bigger as a result of greatly reduced U.S. income taxes for nonresident aliens and foreign corporations.1
Because of the new Trump tax law, (“the Trump Tax Bill”) a foreign investor could receive a forty percent (40%) reduction in the U.S. income tax of his or her gains and income from their real estate investments. For those foreign investors who already were invested in U.S. real estate, their after tax returns could now be forty percent more valuable without raising a finger.2Read More
There are several techniques to insure that accumulated wealth and income earned prior to becoming a United States taxpayer can be protected from United States taxes. This requires planning in advance by nonresident alien individuals who will become United States taxpayers.
Very often there may be a Ponzi Scheme financial theft, in which certain taxpayers have profited since they made early investments and were paid unusual profits that did not exist. Often taxpayers in Ponzi Schemes that have benefited from the financial loss of others are called upon by a trustee to forfeit the profits made in the Ponzi Scheme. Read More
American citizens and residents often have placed funds in “foreign bank accounts” in banks all over the world. There is a requirement that all of these foreign bank accounts be reported to the United States on an annual basis and that United States income taxes be paid on all of these bank deposit funds.
Many American taxpayers who have been unaware of this requirement are now being pursued for taxes and penalties for not reporting their foreign bank deposits. There are two Internal Revenue procedures that will permit American taxpayers, who have not properly reported their foreign bank deposits, and the income therefrom, to come forward and report their foreign bank deposits. This avoids significant fines and penalties on a United State taxpayer who has not reported foreign bank deposits. Read More
As a general rule, nonresident alien individuals and foreign corporations are not subject to tax unless the income is “from a United States source”. There are different rules to determine when income is from a United States source.
Nonresident alien individuals are taxed differently than the United States taxpayers on passive income such as interest and dividends and royalties.
This pattern requires the foreign taxpayer to pay an amount on the gross income that is earned. Insofar as business income earned by the foreign taxpayers, they are taxed the same as United States taxpayers, except they will only be taxed on their United States source income. Read More
There are several investments that turn out to be fraudulent schemes in which investors invest their hard earned funds and lose those funds because there was never in fact an actual investment that produced profits. Generally, those frauds are known as Ponzi Schemes.
Taxpayers who lose money in Ponzi Schemes may enjoy a tax advantage and recoup some of their lost funds by deducting their losses as financial theft losses. Deductions may be used against income that is being earned by the defrauded taxpayer, both before and after the fraud is discovered. There are several important rules that must be followed to enjoy this tax benefit.
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