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June 11, 2018 - Phil Hodgen

Resident for Income Tax Purposes but Not Gift Tax Purposes

I received an email from a practitioner this morning and figured it’s worth a blog post.

Reader C in Sydney asked me:

Hi Phil,

Would a MFJ couple (US citizen and NRA Spouse) using Sec 6013(g) Election qualify for Unlimited Spousal transfer from decedent US Citizen?  Inquiring minds would like to know 🙂

Election to be a U.S. taxpayer

Nonresidents who are married to U.S. persons (citizens or residents for income tax purposes) can choose to be fully subject to U.S. income tax laws.  Ordinarily, a sane person would attempt to avoid this status, if possible.

But sometimes we do the math and it actually saves tax overall to do so.  ... continue reading

Americans Living Abroad
June 8, 2018 - Phil Hodgen

Community Property for Americans Married to Nonresidents

Let’s look at the taxation of income earned by spouses living in community property jurisdictions. When a U.S. person is married to a nonresident alien, the tax rules are different.

The normal rules: two U.S. taxpayers

The normal rules are described in IRS Publication 555.1 Where spouses are subject to community property rules and they file separately, community income is split equally between the two spouses. The community property jurisdiction might be California. Or it might be any one of a number of countries outside the United States.

Different rules for a nonresident alien spouse

When one of the spouses is a nonresident alien, the rules are different.... continue reading

Friday Edition
June 5, 2018 - Debra Rudd

Tax Return Filing Deadline for Expatriates

Filing deadline for expatriates is approaching

We are just a few short days away from a very important date. If you expatriated during 2017, chances are you need to file your tax return and Form 8854 by June 15, 2018. You also need to make full payment of any tax due by that date.

If you need more time to get the tax return ready, you can file for an extension to December 15. However, the payment due date remains June 15, 2018.

Today’s topic will be limited to a description of the filing and payment deadlines for expatriates and how to get an extension to file your tax return.... continue reading

Expatriation
May 25, 2018 - Phil Hodgen

Build Your Holding Structure Before You Sign a Purchase Contract

Hello from Singapore by way of Jakarta, and welcome to the Friday Edition. It’s all alt-country1 and international tax here, folks.

Go fire up Ribbon of Highway by Christy Hays on Ye Olde YouTube (or here on Spotify) then sit back and give this a read.

Build Your Holding Structure Before You Sign a Purchase Contract

For our literary purposes, you are a nonresident and noncitizen of the United States. You sign a contract to buy U.S. real estate, then think of tax planning and come to see me.

You decide on some kind of holding structure to own the real estate.... continue reading

Friday Edition
May 22, 2018 - Debra Rudd

How to Apply the Gain Exclusion for Covered Expatriates

We often mention that covered expatriates, who are subject to a deemed sale of all their worldwide assets (with a few exceptions), are permitted to exclude the first $700,000 or so of gains that arise from the deemed sale.

For someone hiring us to prepare their tax return, that is typically all they really want to know – “my exit tax is lower because I get to exclude some of this pretend income”.

It is rare that we talk about how to apply the gain exclusion, because that is the behind-the-scenes work that we do for our clients when preparing their tax returns.... continue reading

Expatriation