These are some notes I took about how the tax cut affects passive foreign investment companies (PFICs)–or does not affect PFICs.
The short answer is that not much changed, particularly if you are an individual. PFICs stay more or less as bad as they were before. The dramatic changes to tax law that just passed do not affect PFIC owners much.
The Code citations used in this post refer to provisions as amended by the tax cut–unless, of course, the citation notes that it refers to the provisions without amendment.... continue reading
An email from a New York CPA I know (hi M.S.) raised an interesting procedural question. A green card holder is married to a U.S. citizen. The green card holder files Form I-407 but wishes to continue filing jointly with his wife.
... continue reading
A guy files the I-407 (forced to at border) on (Month) 15, 2017, but he is married to a U.S citizen and wishes to continue to file jointly as a U.S .resident alien for tax. He is living outside the U.S.
Does he have to by law file Form 8854 and file dual status for 2017 as at (Month) 15, 2017?
This is a war story:
I have owned shares of a foreign company that rents out a warehouse for years. It operates on a fiscal year ending 31 March, 2017. I immigrated to the US on 1 February, 2017. I believe it is a PFIC. I would like to make a QEF election. When do I make this election, and is there anything else I need to do?
In this post, I will explain why the shareholder would make a QEF election with his 2017 tax return, why he does not need to do a deemed sale election, and how the passthrough of income works for 2017.... continue reading
I received a question from a reader, and it is a good way to explain the saving clause of an income tax treaty.
The question, from reader E.C., is simple:
Are U.S. Social Security benefit payments to a U.S. citizen who is a resident of Italy taxable in Italy or in the U.S.?
Income tax treaties are agreements between two countries. Treaties attempt to make live easier for residents of one country who have income from the other country.
So, for instance, a U.S. citizen living in Italy is:
Let’s talk about how a covered expatriate’s Roth IRA is taxed at the time of expatriation.Summary
A Roth IRA is treated as if there is a make-believe distribution to a covered expatriate on the day before renouncing U.S. citizenship or abandoning green card status.
The income tax cost of the make-believe distribution is zero if:
If those two conditions are not satisfied, part of the fictional distribution will be taxable.... continue reading