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August 28, 2009 - Phil Hodgen

A rare reported U.S. case on trust protectors

Trust protectors are a rare breed in U.S. trusts. Our firm knows about using protectors because we do so much work with offshore (i.e., non-U.S.) trusts, where use of a protector is common. Case law from U.S. courts defining a protector’s rights and responsibilities are even rarer.

The Missouri Court of Appeals has a recent opinion involving a protector (warning: PDF). Cut to the chase — the Protector was a fiduciary, had an obligation to monitor the trustee’s (bad) behavior, and replace the trustee if necessary.

Memo to all personnel

Here are life’s lessons (re-learned) from this case:

  • If you are a lawyer drafting a trust, do not blithely add a trust protector provision until you know what you’re doing.
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Foreign Business Activities in the USA Nonresidents with US Activities Tax and Trusts
July 9, 2009 - Phil Hodgen

Real estate holding structures for nonresidents – tax law changes coming

This is a distant early warning to nonresidents with U.S. real estate investments. The warning applies to multi-national corporations as well (businesses that operate in the United States and elsewhere in the world) but I am going to focus on real estate investors here.

RISK

An proposed change in U.S. tax law may double the tax you pay when you sell the real estate.

WHO MAY BE AT RISK

Anyone owning U.S. real estate through a holding structure that contains a corporation for which an election has been made to treat it as a disregarded entity.

SUGGESTED ACTION

Examine your holding structures (that wedding cake of trusts, corporations, partnerships, and limited liability companies that you pay for every year) and plan to change those structures before the end of 2010.... continue reading

Foreign Business Activities in the USA US Real Estate Investments
May 11, 2009 - Phil Hodgen

FBAR requirements apply to nonresidents too

The U.S. government requires “U.S. persons” to file Form TD F 90-22.1 (PDF) to report ownership or control of financial accounts located outside the United States.

Nonresidents of the United States will be pleased to know that stealth changes to this Form now may also impose this filing requirement on them. A “U.S. person” is now includes “a person in and doing business in the United States.” (See the instructions for Form TD F 90-22.1).

So who might be included?

  • A U.S. company has a director who is a nonresident of the United States. The director comes to the United States every now and then on company business.
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Foreign Business Activities in the USA US Real Estate Investments Voluntary Disclosure
April 17, 2009 - Phil Hodgen

Guidance for real estate brokers with foreign clients

I made my first post at Bloodhoundblog.com. It is “keep yourself sane” advice for real estate brokers handling sales with foreign buyers or sellers.

Cool.... continue reading

Foreign Business Activities in the USA US Real Estate Investments
February 13, 2009 - Phil Hodgen

TIGTA and the international tax gap

I am completely convinced that the phrase “international tax gap” is a marketing device coined by certain members of the Fedborg with specific intentions in mind.

But I digress.

The Treasury Inspector General for Tax Administration is an arm of the Treasury Department that investigates stuff and writes about it. Yesterday TIGTA released a report on the international tax gap. No surprise here. A regulatory and enforcement unit of the U.S. government suggests more legislation and enforcement.

For those of you doing international business transactions, here are the takeaways:

  • It’s going to get worse. Meaning you’re going to spend more money on people like me.
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Foreign Business Activities in the USA US Real Estate Investments