San Francisco Tax Blogs | Diosdi, Ching, & Liu, LLP

03Jan 2022 by Anthony Diosdi

What are the Tax Deadlines for 2022?

Tax Law

Tax day is one of the more stressful times for individual and corporate filers. By December 31, you have made all of the decisions that could impact your tax picture for 2021. Now, it is time to get to the actual work of filing your tax return. Tax day is not always April 15. When the day falls on a weekend, the IRS will give you additional time to file taxes because the deadline depends on when your tax return can be postmarked. This year, April 15 falls out on a Friday. Midnight ends up being on a Saturday, so the IRS will give you time to get to the post office to mail your return. The Tax Deadline Is a Little Later This Year This year, the first Monday…

29Dec 2021 by Anthony Diosdi

One Potential Strategy Foreigner Investors Can Utilize to Transfer U.S. Real Property out of their Estate to Avoid the Estate and Gift Tax

Tax Law

By Anthony Diosdi Individuals that are not domiciled in the United States are subject to an estate and gift tax on the transfers of real property physically located in the United States. U.S. estate and gift taxes are charged at high effective rates (up to 40%) in the case of nonresident aliens, because the unified credit provides an exemption amount equivalent to just $60,000, an amount that has not increased in decades. See IRC Section 2101. For U.S. federal estate and gift tax purposes, the term “residency” means “domicile.” While the U.S. federal income tax concept of residency relates only to physical presence in a place for more than a transitory period of time, domicile relates to a permanent place of abode. For U.S. federal estate tax purposes a person…

29Dec 2021 by Anthony Diosdi

Anything You Email Can and Will Likely be Used Against You in a Criminal Tax Case- Unless an Exception Applies to Exclude the Email

Tax Law

By Anthony Diosdi When an individual is charged with murder, the focus of the investigation is directed immediately to a limited historical event. Questions of where the defendant was on the night in question, what his relationship was to the victim, whether he had any motive to kill the victim, can be pursued immediately by both the prosecution and the defense. Criminal tax cases are different. Most criminal tax investigations start with a defendant and seek to find crime. This is the case whether a tax crime was committed yesterday or five years ago. If the initial suspicion that precipitated the investigation proves worthless, it does not mean that the individual being investigated by the Internal Revenue Service (“IRS”) gets off “scot free.” There are other years and other transactions…

21Dec 2021 by Anthony Diosdi

When Foreigners Own U.S. Real Property: Planning for the Estate and Gift Tax Associated with U.S. Property Ownership with an Emphasis on Partnerships

Tax Law

By Anthony Diosdi In the individual foreign investor setting, inbound tax planning often requires a balancing of U.S. income tax considerations and U.S. federal gift and estate tax considerations. While U.S. federal income tax rates on the taxable income of an individual foreign investor are the same as those applicable to a U.S. citizen or resident, the federal estate and gift tax as applied to individual foreign investors can and often results in a dramatically higher burden on a taxable U.S. estate or donative transfer of a foreign investor than for a U.S. citizen or domiciliary. As a result, for many individual foreign investors, the most important U.S. tax consideration is the U.S. federal estate and gift taxation. The United States imposes estate and gift taxes on certain transfers of…

21Dec 2021 by Anthony Diosdi

One Potential Strategy Foreigner Investors Can Utilize to Transfer U.S. Real out of their Estate to Avoid the Estate and Gift Tax

Tax Law

By Anthony Diosdi Individuals that are not domiciled in the United States are subject to an estate and gift tax on the transfers of real property physically located in the United States. U.S. estate and gift taxes are charged at high effective rates (up to 40%) in the case of nonresident aliens, because the unified credit provides an exemption amount equivalent to just $60,000, an amount that has not increased in decades. See IRC Section 2101. For U.S. federal estate and gift tax purposes, the term “residency” means “domicile.” While the U.S. federal income tax concept of residency relates only to physical presence in a place for more than a transitory period of time, domicile relates to a permanent place of abode. For U.S. federal estate tax purposes a person…

17Dec 2021 by Anthony Diosdi

An Overview of Type E Tax-Free Reorganizations

Tax Law

By Anthony Diosdi In the corporate tax context, the term “reorganization” is a statutory term of art. Rather than providing a general definition, the Internal Revenue Code attempts to provide precise definitions for the term “reorganization” in Section 368(a)(1) with an exclusive list of seven specific types of transactions that will be considered “reorganizations.” Subparagraphs (A) through (G) of Section 368(a)(1) each provide a description of a particular reorganization transaction. Unless a transaction fits into one of the seven categories stated in subparagraphs (A) through (G), it is not a corporate reorganization. A tax-free reorganization sometimes involves only a single corporation which is undergoing a readjustment to its capital structure. The most common form of a reorganization that involves recapitalization is a Type E reorganization. Internal Revenue Code Section 368(a)(1)(E)…

17Dec 2021 by Anthony Diosdi

An Overview of Type F Tax-Free Reorganizations

Tax Law

By Anthony Diosdi In the corporate tax context, the term “reorganization” is a statutory term of art. Rather than providing a general definition, the Internal Revenue Code attempts to provide precise definitions for the term “reorganization” in Section 368(a)(1) with an exclusive list of seven specific types of transactions that will be considered “reorganizations.” Subparagraphs (A) through (G) of Section 368(a)(1) each provide a description of a particular reorganization transaction. Unless a transaction fits into one of the seven categories stated in subparagraphs (A) through (G), it is not a corporate reorganization. A Type F reorganization involves “a mere change in identity, or place of organization of one corporation, however effected.” See IRC Section 368(a)(1)(F). The major tax advantage to classification as a Type F reorganization is a preferential set…

17Dec 2021 by Anthony Diosdi

An Overview of Type C Tax-Free Reorganizations and Type C Tax-Free Triangular Reorganizations

Tax Law

By Anthony Diosdi In the corporate tax context, the term “reorganization” is a statutory term of art. Rather than providing a general definition, the Internal Revenue Code attempts to provide precise definitions for the term “reorganization” in Section 368(a)(1) with an exclusive list of seven specific types of transactions that will be considered “reorganizations.” Subparagraphs (A) through (G) of Section 368(a)(1) each provide a description of a particular reorganization transaction. Unless a transaction fits into one of the seven categories stated in subparagraphs (A) through (G), it is not a corporate reorganization. In a Type C reorganization, the purchasing corporation acquires “substantially all of the properties” of another corporation. Thus, a Type C reorganization is often referred to as an “asset acquisition.” If the target corporation transfers less than substantially…

16Dec 2021 by Anthony Diosdi

An Overview of Type B Tax-Free Reorganizations and Type B Tax-Free Triangular Reorganizations

Uncategorized

By Anthony Diosdi In the corporate tax context, the term “reorganization” is a statutory term of art. Rather than providing a general definition, the Internal Revenue Code attempts to provide precise definitions for the term “reorganization” in Section 368(a)(1) with an exclusive list of seven specific types of transactions that will be considered “reorganizations.” Subparagraphs (A) through (G) of Section 368(a)(1) each provide a description of a particular reorganization transaction. Unless a transaction fits into one of the seven categories stated in subparagraphs (A) through (G), it is not a corporate reorganization. In a Type B reorganization, the purchasing corporation (P) acquires a controlling interest in the target corporation (T) stock from the T shareholders solely in exchange for all or part of P’s voting stock. There are two important…

15Dec 2021 by Anthony Diosdi

International CorporateTax-Free Mergers and Acquisitions- is there Anywhere to Hide from Section 367?

Tax Law

By Anthony Diosdi Whenever a U.S. person decides to establish a business outside offshore that will be conducted through a foreign corporation, it will likely be necessary to capitalize the foreign corporation with a transfer of cash and other property in exchange for corporate stock. When appreciated assets, such as equipment or intangible property rights (i.e., patents, trademarks, copyrights, and other intangible property), is transferred to a foreign corporation, the U.S. transferor may be subject to taxable gain. This taxable gain will be realized by the transferor unless one of the tax-free exchange provisions of the Internal Revenue Code applies. The imposition of U.S. tax on a transfer of appreciated property to a foreign corporation is a substantial deterrent to the transfer of property. Accordingly, the taxplanner should seek to…