News & Analysis as of September 22, 2024

Income Taxes › Foreign Trusts

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Income taxes are taxes that are collected on the individual earnings of persons or entities. Depending on the jurisdiction, income taxes are calculated and collected in a variety of ways. Some tax systems collect income taxes based on a progressive scheme, while others may utilize a proportional or regressive framework. less -

Proposed Regulations on Loans of Cash and Property from Foreign Trusts

Freeman Law on 6/21/2024

On May 8, 2024, the Treasury Department issued proposed regulations regarding the classification, taxation, and reporting of foreign trusts. The proposed regulations were issued for sections 643(i), 679, 6039F, 6048, and 6677...more

Home Is Where the Heart Is (and where the IRS will try to find you): Thinking of Living Abroad? Even ExPats May Have to Pay U.S....

Lowenstein Sandler LLP on 11/1/2023

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

The High IRS Tax Rates on a Foreign Trust

Allen Barron, Inc. on 10/31/2023

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

What Makes a Trust Foreign or Domestic—And Why Does It Matter?

Blank Rome LLP on 7/13/2023

The United States is one of two countries in the world that imposes a tax on the worldwide income of its citizens. (The other is the East African country of Eritrea, which imposes a two percent tax on its citizens living...more

Fighting a Three Headed Dog and Tax Classifications of Foreign Trusts

Bilzin Sumberg on 3/6/2023

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

Is a Stiftung a Foreign Trust? Form 3520 Penalties?

Freeman Law on 9/19/2022

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

How Do I Know if I Have an IRS Form 3520/3520-A Filing Obligation?

Freeman Law on 8/25/2022

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 IRS’s Renewed Focus on Abusive Trust Arrangements

Freeman Law on 1/14/2022

Taxpayers have long utilized trust arrangements for the transfer of wealth to beneficiaries or for the protection of assets from creditors. Generally, there is nothing nefarious about these types of arrangements. Rather,...more

Navigating Pandora’s Hallelujah Mountains: Civil Law Foundations, U.S. Tax Classification and Related Penalty Issues

Bilzin Sumberg on 12/14/2021

One of the most challenging aspects of assisting clients with international tax planning is determining the right entity to use for that client’s situation. Although the Internal Revenue Service (the “IRS”) simplified the...more

Failure to Report Foreign Trust Results in 35% Penalty Against the Owner/Beneficiary

Freeman Law on 9/1/2021

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

Emily S. Wilson et al. v. United States: Playing Battleship with the Internal Revenue Service

Bilzin Sumberg on 8/5/2021

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

What Makes a Trust a "Foreign" Trust?

Bilzin Sumberg on 2/25/2021

In a previous post, we discussed the tax implications for U.S. beneficiaries who receive a distribution from a foreign trust. That discussion assumed that the trust in question was, in fact, a foreign trust for U.S. federal...more

Weekly IRS Roundup November 2 – November 6, 2020

McDermott Will & Emery on 11/11/2020

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of November 2, 2020 – November 6, 2020... November 2, 2020: The IRS announced COVID-19-related...more

[Webinar] US Taxation of Grantor/Non-Grantor Trusts - June 24th, 3:00 pm BST

McDermott Will & Emery on 6/23/2020

Astrid Owen leads this interactive webinar to discuss the US taxation of US beneficiaries and US settlors of non-US trusts. The benefit of using non-US grantor trusts established by a non-US person for US beneficiaries...more

One Note Samba

Gerald Nowotny - Law Office of Gerald R.... on 4/30/2020

Using U.S. domestic trusts and private placement insurance products to invest in the U.S. ...more

Samba de Una sola Nota - Uso de fideicomisos nacionales americanos y productos de seguros de colocación privada para invertir en...

Gerald Nowotny - Law Office of Gerald R.... on 4/28/2020

Este artículo relacionará los beneficios del uso de fideicomisos estadounidenses para ciertas inversiones entrantes. Fideicomisos de EE. UU., considerados fideicomisos extranjeros con fines fiscales, es una nota....more

What are some of the monetary penalties and other consequences of failing to properly report my foreign real estate and other...

Rosenberg Martin Greenberg LLP on 3/21/2019

Depending upon how foreign real estate is owned and/or controlled, a number of different tax reporting regimes may be implicated. Each of these has its own corresponding penalties and generally applies to United States...more

Budget 2017

Hogan Lovells on 2/22/2017

The 2017 Budget was presented by Minister Pravin Gordhan before Parliament on 22 February 2017. The 2017 tax proposals are projected to raise ZAR28 billion, and increase the tax burden from 26% of GDP in 2016/17 to 26.7%...more

Non-Dom Reforms Update – United Kingdom

McDermott Will & Emery on 8/24/2016

Summary - Following the United Kingdom’s vote to leave the European Union on 23 June, and the change of Prime Minister and to the UK Government, there was significant uncertainty regarding what would happen to the...more

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Income Taxes › Foreign Trusts

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