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Mastering Tax Issues in San Francisco: Why Diosdi & Liu, LLP Stands Out

Mastering Tax Issues in San Francisco: Why Diosdi & Liu, LLP Stands Out

Tax Law
When it comes to tax matters in San Francisco, finding reliable legal counsel is paramount. With the ever-evolving tax landscape, individuals and businesses alike need adept guidance to ensure compliance and optimize their financial strategies. Diosdi & Liu, LLP emerges as a trusted ally, offering comprehensive tax services tailored to the unique needs of clients in the Bay Area. Understanding San Francisco Tax Laws San Francisco's tax regulations can be complex, requiring a nuanced understanding to handle effectively. Whether it's individual tax planning, corporate tax obligations, or resolving IRS disputes, having a proficient San Francisco tax attorney by your side is essential. Diosdi & Liu, LLP specializes in deciphering the intricacies of local tax laws, ensuring clients remain compliant while maximizing their financial well-being. Personalized Tax Solutions At Diosdi & Liu, LLP, we recognize…
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How to Report Cross-Border Payments to the IRS on Form 1042-S

How to Report Cross-Border Payments to the IRS on Form 1042-S

Tax Law
By Anthony Diosdi The United States often taxes the gross income received by foreign persons. In addition, the person controlling the payment of the income may need to deduct and withhold U.S. taxes before payment is made to a foreign person. The following types of foreign persons may be subject to U.S. withholding taxes:(i)  Nonresident alien individuals;(ii)  Foreign corporations;(iii)  Foreign partnerships, and(iv) Foreign estates and trusts.A nonresident alien is an individual who is neither a citizen nor resident of the United States. A foreign corporation is a corporation organized or created under the laws of a foreign country. Likewise, a foreign partnership is a partnership organized or created under the laws of a foreign country. An estate is foreign if its foreign-source income, other than any income effectively connected with…
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How to Report Cross-Border Payments to the IRS on Form 1042

How to Report Cross-Border Payments to the IRS on Form 1042

Tax Law
By Anthony Diosdi The United States often taxes the gross income received by foreign persons. In addition, the person controlling the payment of the income may need to deduct and withhold U.S. taxes before payment is made to a foreign person. The following types of foreign persons may be subject to U.S. withholding taxes:(i)  Nonresident alien individuals;(ii)  Foreign corporations;(iii)  Foreign partnerships, and(iv) Foreign estates and trusts.A nonresident alien is an individual who is neither a citizen nor resident of the United States. A foreign corporation is a corporation organized or created under the laws of a foreign country. Likewise, a foreign partnership is a partnership organized or created under the laws of a foreign country. An estate is foreign if its foreign-source income, other than any income effectively connected with…
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IRS Form 5472: Do You Need to File it?

IRS Form 5472: Do You Need to File it?

Tax Law
By Anthony Diosdi The Form 5472 is a mandatory return that must be filed with the Internal Revenue Service (“IRS”) for reportable transactions between a reporting corporation and its foreign related party. This article will discuss whether an entity has an obligation to file a Form 5472.Form 5472: Basic TerminologyA Form 5472 is required to be filed by a domestic corporation (or a disregarded entity) that can be classified as a reporting corporation. An entity can be classified as a reporting corporation, if, at any time during the taxable year, 25% or more of its stock, by vote or value, is owned directly or indirectly by at least one foreign person.A foreign person is:1) An individual who is a citizen or resident of a U.S. possession who is not otherwise…
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Why the IRS Does Not Have the Authority to Assess and Collect a Section 6039F Penalty in Connection With a Late Filed Form 3520

Why the IRS Does Not Have the Authority to Assess and Collect a Section 6039F Penalty in Connection With a Late Filed Form 3520

Tax Law
By Anthony Diosdi There are a number of cases challenging the IRS’s ability to assess and collect penalties associated with failing to timely disclose foreign gifts on a Form 3520 making their way through various federal courts. This article discusses the IRS’s statutory ability to assess and collect Section 6039F Penalties associated with failing to timely disclose a foreign gift on a Form 3520. Introduction Section 6039F of the Internal Revenue Code requires U.S. persons (other than certain exempt organizations) to furnish information regarding the gifts (including bequests) that such person receives from a non-U.S. donor if the U.S. person treats the property so received as a gift for tax purposes, and the aggregate value of such gifts from the donor in a taxable year exceeds an annual threshold, which…
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An Introduction to the Taxation of U.S. Real Estate Held by Foreign Investors

An Introduction to the Taxation of U.S. Real Estate Held by Foreign Investors

Tax Law
By Anthony Diosdi Foreign investors actively invest in U.S. real estate by speculating on land and developing homes, condominiums, and commercial buildings. Many foreign investors own recreational property in popular U.S. beach and ski destinations. This article summarizes the U.S. tax consequences associated with a foreign investor’s acquisition of different U.S. property interests. This article also provides a number of tax planning options that should be considered by foreign investors when acquiring U.S. real estate.Types of U.S. Taxes For Investors Should Consider When Investing in U.S. Real PropertyThe acquisition of U.S. real property has no immediate U.S. tax consequences to the foreign investor. Although the acquisition of U.S. real property by a foreign investor will have no immediate U.S. tax consequences, there are a number of future tax consequences that…
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FIRPTA and the IRS’ Ability to Assess Interest When No Tax is Due 

FIRPTA and the IRS’ Ability to Assess Interest When No Tax is Due 

Tax Law
By Anthony Diosdi When a U.S. income tax nonresident alien or a foreign corporation (hereinafter referred to as a “Foreign Taxpayer”) disposes of a U.S. real property interest (“USRPI”), the Foreign Taxpayer is subject to the Foreign Investment in the U.S. Real Property Tax Act of 1980 (“FIRPTA”). FIRPTA is designed to ensure that a foreign investor is taxed on the disposition of a U.S. property interest. The term “disposition” means transfer. To ensure collection of FIRPTA, any transferred acquiring a U.S. real property interest must deduct and withhold a tax on the amount realized on the disposition. A transferee is any person, foreign or domestic, that acquires a U.S. real property interest by purchase, exchange, gift, or any other type of transfer. See Treas. Reg. Section 1.1445-1(g)(4). The amount…
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Understanding the Vital Role of San Francisco Tax Lawyers at Diosdi & Liu, LLP

Understanding the Vital Role of San Francisco Tax Lawyers at Diosdi & Liu, LLP

Tax Law
In the complex landscape of tax law, individuals and businesses in the Bay Area face unique challenges that require professional guidance and expertise. Diosdi & Liu, LLP, a premier law firm based in San Francisco, stands at the forefront of providing specialized tax legal services to a diverse clientele. Our experienced San Francisco tax lawyers are dedicated to delivering comprehensive solutions tailored to meet your specific needs, ensuring compliance and optimizing your tax position. Why Choose San Francisco Tax Lawyers at Diosdi & Liu, LLP? Tax law is not only intricate but also constantly evolving. It demands a deep understanding of both federal and state regulations to effectively manage liabilities and seize opportunities for tax savings. The tax attorneys at Diosdi & Liu, LLP bring a wealth of knowledge and…
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The U.S. Taxation of Foreign Trusts

The U.S. Taxation of Foreign Trusts

Tax Law
By Anthony Diosdi This article provides an overview of the U.S. federal tax rules governing U.S. beneficiaries of foreign trusts. The term “U.S. person means:1. A citizen or resident of the United States;2. A domestic partnership;3. A domestic corporation;4. Any estate other than a foreign estate;5. A domestic U.S. trust.The first step is to determine whether the entity at issue is a trust. A trust is a fiduciary relationship in which a trustee gives another party, known as the trustee, the right to hold title to property or assets for the benefit of a third party. Thus, in order to have a trust, there must be an arrangement, written or oral, in which a trustee takes title to property, which is protected or conserved for beneficiaries of the trust.Once a…
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The Reshoring or Domestication of a Controlled Foreign Corporation

The Reshoring or Domestication of a Controlled Foreign Corporation

Tax Law
By Anthony Diosdi The Internal Revenue Code provides that a United States shareholder of a Controlled Foreign Corporation or (“CFC”) is subject to tax on the CFC’s Subpart F or “global intangible low-taxed income” or (“GILTI”). The Subpart F and GILTI are anti-deferral tax regimes. Subpart F and GILTI results in most income earned by foreign corporations being subject to current U.S. taxation. All U.S. shareholders other than U.S. C corporations are disadvantaged under the Subpart F and GILTI regimes, because foreign tax credits and certain deductions (i.e., Section 250 permits a deduction of 50 percent of the GILTI amount calculated under Section 951A) apply only to domestic corporations. Unless an affected U.S. shareholder undertakes planning to minimize their tax exposure on Subpart F income and GILTI, such as the…
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