The IRS applies different methodologies for calculating the gambling winnings of US taxpayers and Nonresident Aliens (NRAs). For US taxpayers, the IRS calculates earnings based on winnings over the course of a gambling session, while for NRAs the IRS has taken the position that gambling winnings should be calculated based on each bet. So, for…
DetailsWhile it is uncommon for parents in the US to grant their minor children signatory authority over bank accounts, in other countries it is common practice to avoid inheritance, transfer taxes, or for other reasons. While this is generally not a problem, it can become an issue when the Internal Revenue Service (IRS) becomes involved.…
DetailsBefore delving headfirst into the taxation of intellectual property, it is important to understand what constitutes intellectual property and how it relates to intangible property. Intangible property is any property that has no physical substance, and intellectual property is intangible property created by individual(s). While these terms are often used interchangeably, some types of intangible…
DetailsAfter publishing final rules regarding people reporting their signature authority over foreign financial accounts, the Financial Crimes Enforcement Network (FinCen) received questions and comments about reporting for certain types of accounts. In response FinCen delayed the reporting requirement for individuals with signature authority over these types of accounts until June 30, 2012. The most problematic…
DetailsThese publications do not constitute legal advise. Further information regarding this notice. Confusion at two US Consulates in Canada during recent relinquishment cases initiated by Flott & Co. clients revealed the need to develop forms and documents for use in establishing the intentional loss of US citizenship in the past. The current form, Form DS-4079,…
DetailsLast week, I introduced Section 892 regulations, which address the taxation of U.S. income earned by foreign governments. In a nutshell, Section 892 exempts foreign governments’ income from investing in U.S. stock, bonds and certain financial instruments; other types of income are not exempt. To prevent unwary governmentally controlled entities who inadvertently conducted a…
DetailsDebt obligations issued by the US government are defined as US property for estate tax purposes. Yet, what if you diversified your portfolio and have an US bank account? Would these things also count as it property within the US? It depends. Say you deposit $75,000 into ABC Bank, which is located in the US. …
DetailsThe recent surge in foreign government investing in the U.S. economy, particularly through Sovereign Wealth Funds, has prompted the Internal Revenue Services (“IRS”) to modify the existing Section 892 regulations regarding taxation of U.S. income earned by foreign governments. In a nutshell, Section 892 exempts foreign governments’ income from investing in U.S. stock, bonds and…
DetailsThis week, we will start with a simple issue. Say you invested in Treasury Bonds. Did you know that it property within the US for estate tax purposes, even if you are a nonresident noncitizen of the US? Debt obligations of a US person are categorized as property within the US for estate tax purposes.[1] …
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