We can help you cleanly exit from the US system -- we know the tax rules and have been through the process many times.Learn More
Buying the property correctly is the secret to tax success. We know how to set things up correctly from the start.Learn More
Trusts can act as a firewall against the US tax system, but are hard to do right. We create, terminate, and fix trusts.Learn More
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If you are an American living abroad and sweating the October 15 tax filing deadline for your 2016 income tax returns, there is a possible piece of relief. You may be able to qualify for a further extension of time for filing your tax return — to December 15, 2017.Summary
For American taxpayers living abroad, if you want to get a filing deadline of December 15, 2017 for your 2016 Form 1040, do this:
Everyone focuses on the income tax side of expatriation. Understandable. The year of giving up U.S. citizenship or permanent residence is a busy year and income tax is painful.
But estate tax problems can lurk, even after expatriation. Expatriates receiving inheritances from U.S. persons is one side of the equation.
Let’s look at the other side of the equation: money flowing back to the U.S. when an expatriate dies.
An expatriate (covered or otherwise) leaves an inheritance to a U.S. person. Here are the questions to ask:
This is a question sent to us through email:
I invested in Australian stapled securities. Do I have a PFIC problem?
In this post, I will introduce the concept of stapled securities and go through the questions we ask to determine whether the US person holds a PFIC. Because we have limited space, I am going to assume that the particular stapled security we are discussing is used to hold real estate investments.
It is a type of securities arrangement in Australia.
You have a unit trust that holds property. The unit trust hires a limited company to manage the property.... continue reading
This week, I want to highlight a risk: when an unanticipated FinCEN Form 114 filing requirement might apply to a trust.
There is a weird situation where a foreign trust (as defined for income tax purposes) may be required to file FinCEN Form 114. (FinCEN Form 114 is how you tell the U.S. government about your foreign financial accounts).
It’s weird, but intentional.Short Attention Span Summary
Does the trust look like a normal domestic trust but get taxed as a foreign trust? Watch out. You have a potential FinCEN Form 114 filing requirement.Look Domestic, Taxed Foreign
There are good reasons to create trusts that look like domestic trusts but are taxed as foreign trusts.... continue reading
Let’s say you have expatriated (gave up U.S. citizenship or your green card) and you expect to receive an inheritance from a U.S. person–perhaps your parents.
How is that inheritance taxed?
Correspondent KP emailed me to ask exactly this question. (Hint: you can email ask a question, too; just hit reply and suggest a topic or ask a question for me to answer in the newsletter).
... continue reading
Perhaps you have already answered this in the expatriation blog and I just couldn’t find it (in which case, please send me a link), or it might be worth considering as a future topic:
If a person has renounced US citizenship, filed the 8854, and IS -for all intents and purposes- considered to be a non-resident non-citizen, what US tax/reporting obligations come into play if said person inherits a US estate from a US citizen & resident relative?