One Note Samba
On May 8, the IRS published proposed regulations that provide guidance regarding the information reporting of transactions with foreign trusts, the receipt of large foreign gifts and loans from, and uses of property of...more
United States citizens and residents are often not aware of the myriad of foreign information return filing obligations that exist under federal tax laws. For example, buried within the Code are reporting obligations...more
Unlike most countries in the world, if you are a citizen or resident of the United States, the government gets to tax all of your worldwide income, regardless of where it's earned or where you live. And if the IRS decides...more
Are you concerned about the high IRS tax rates on a foreign trust? It is important to understand the tax and reporting consequences on this specific type of investment. It may very well be time to evaluate the net value of...more
The Continuing Saga of U.S. Tax Classification of Foreign Trusts and Related Penalty Issues - In Greek mythology, Cerberus, a three-headed dog, was known as the guardian of the underworld. In more recent literature, a...more
In the recent case of Rost v. United States, the Fifth Circuit analyzed whether a foreign entity should be classified as a foreign trust subject to IRS Form 3520 penalties. The case arose in the context of a Liechtenstein...more
Interests in or transactions with foreign trusts can cause headaches for federal income tax purposes. Depending on the interest or transactions at issue, U.S. citizens or residents may have to file a Form 3520, a Form...more
The 35% penalty under I.R.C. section 6677 for failing to report a distribution from a foreign trust applies against a person who is both the beneficiary and grantor/owner of a foreign trust. At least, that is now the rule...more
As many readers may know, Joseph Wilson (“Mr. Wilson”) was the settlor, tax owner, and beneficiary of a foreign trust. By virtue thereof, Mr. Wilson, as a U.S. citizen, had the requirement to file IRS Form 3520 and IRS Form...more
A Foreign Trust can be a legitimate instrument for US Taxpayers that may have family members in foreign jurisdictions, have foreign business interests or are the beneficiaries of trusts created in other countries. ...more
Do you or did you have a wealthy relative from a different country? Did that relative make you a beneficiary of a non-U.S. trust? Lucky you. But beware that free wealth....more