Before a green card holder uses the Treaty Tiebreaker provision of a U.S. Tax Treaty, he/she must consider what is the effect of using the Treaty Tiebreaker on:
A. His/her immigration status under Title 8 (will he/she risk losing the Green Card?)
B. His/her status under Title 26 (will he expatriate himself under Internal Revenue Code S. 7701(b)) and subject himself to the S. 877A Exit Tax provisions?
Tracking Storm Linus on the weather websites, watching the storm blow around the white stuff all day long, snow piling up 16 inches and more on it’s way, sneaking peeks at the Super Bowl while trying to write up this post- I realized how far we have come–long, long ways from being Green Card holders.
But I do remember that the transition to Green Card holder from a visa holder can be a somewhat exhilarating, somewhat frustrating journey. This process can take a long time and comes with a lot of trials and tribulations.
The tax rules for a green card holder remain fairly the same as a US citizen or a long time US resident for most purposes. The complications come into play when the Green Card Read More
There’s this question that I always get from my clients: “Do I have to report my real estate holdings in a foreign country?” To which, my answer (in true accountant style) is always: “It depends”. Let me explain further.
You may be a first generation immigrant to the US and still have strong ties to your home country; by way of family elders who live there or a strong sense that you would like to some day retire back there, where you grew up. Or you are an adventurous investor who would like to invest in a little vacation home by the beach in the Caribbean. Or you were stationed abroad through your job and loved it so much that you invested in some property there. Then this blog is for you to read! Read More
When purchasing a real property overseas, there are situations when it may prove advantageous or even necessary to do so through an offshore corporation, rather than owning the property individually. It is crucial to understand that this can also have significant US tax consequences for US persons. Fortunately, “checking the box” on Form 8832 provides a possible solution to this problem, taking advantage of the protections provided by the corporate entity while avoiding many of its tax repercussions.
Benefits of Corporate Ownership
Investment in real property through a vehicle offering limited liability, as opposed to direct ownership, offers numerous protections. Should any legal claims arise, such as in the case of tenant injury when renting out property owned through a corporation, the liability of Read More
If you are a US citizen or resident and you receive gifts or bequests (generally, an inheritance or gift of property by a Will) of money or other property from a foreign (non-US) person or entity, you may need to report these gifts on Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts. Form 3520 is an information return, not a tax return. Many people receiving gifts or bequests get very confused. They mistakenly believe that they have to pay tax when they receive a gift or bequest. This is not the case – bona fide gifts or bequests are not subject to income tax in the hands of the recipient. This remains the case regardless of whether the person giving the gift is a US person or a foreign person. It remains the case regardless of the amount of the gift or bequest. Read More
Given all the press surrounding “Report of Foreign Bank and Financial Accounts” or so-called FBARs, by now we all know about what should be reported on an FBAR, right? Well, given the Internal Revenue Service’s latest assertion in United States, v. John C. Hom, maybe we had better start studying once again.
Online Gambling Accounts
In the Hom case, the taxpayer was an avid and professional internet gambler with online gambling accounts maintained with overseas entities: FirePay.com (based in London), PokerStars.com (based in Isle of Man), and Partypoker.com (based in Gibraltar). Overseas gambling accounts were necessary because of US laws that prohibit the interstate operation of betting businesses in the United States, making online gambling technically illegal. The Read More
If you hold a US Green Card, you can be deported for willfully filing a false tax return (or for aiding and abetting the filing of a false tax return), and, perhaps for willfully failing to file a so-called FBAR. The United States Supreme Court issued a decision on this very matter just last year.
Summary of Kawashima v. Holder
• A Japanese resident alien couple were convicted under the US tax laws for willfully filing a false tax return or aiding and abetting the filing of such a return
• They appealed their deportation under the Immigration and Nationality Act (8 U.S.C. §1227(a)(2)(A)(iii)) as aliens who had been convicted of a so-called “aggravated felony” based on their conviction.
• The United States Supreme Court, held that the crime of willfully making and subscribing a false tax return and the crime of willfully aiding and assisting the preparation of a false tax return are deportable offenses under the Immigration and Nationality Act. Read More