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20Mar 2020 by Anthony Diosdi

The IRS Delays the Filing Deadline from April 15th to July 15th

By Anthony Diosdi Treasury Secretary Steve Mnuchin made the following announcement on Twitter “At @realDonaldTrump’s direction, we are moving Tax Day from April 15 to July 15. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.” This means that in addition to providing taxpayers with additional time to pay their 2019 income tax liabilities, the IRS has extended the 2019 filing deadline from April 15th to July 15th. If taxpayers file extensions, they will be able to extend the filing deadline for their 2019 tax returns to October 15th.Anthony Diosdi is a partner and attorney at Diosdi Ching & Liu, LLP located in San Francisco, California. Diosdi Ching & Liu, LLP also has offices in Pleasanton, California and Fort Lauderdale, Florida.…

31Jan 2020 by Anthony Diosdi

Cross-Border Tax Planning with the Proposed Regulations Regarding Cloud Computing Transactions and Digital Downloads

tax planning

By Anthony Diosdi On August 9, 2019, the U.S. Treasury Department and the Internal Revenue Service (“IRS”) released proposed regulations characterizing cloud computing transactions and “transactions involving digital content.” See Prop. Reg. Sections 1.861-18 and 1.861-19. The proposed regulations modify the current “Software Rules” that govern the taxation of computer programs and transfer of digital content. This article will discuss these new proposed regulations and potential cross-border tax planning opportunities available to businesses involved in cloud computing and digital downloads. An Overview of Current Regulations Promulgated by the Treasury Department and the IRS Regarding the So-Called “Software Rules”The current Income Tax Regulations enumerated in Treasury Regulation Section 1.861-18 otherwise known as the “Software Rules” govern the taxation of transactions involving computer programs. These Software Rules provide guidance on how to…

30Jan 2020 by Anthony Diosdi

Did You Sell Cryptocurrency in 2019?

tax planning

With the ubiquity of online transactions and accounts, taxpayers must take the necessary steps to ensure they are in full compliance with tax laws in regard to these transactions. This certainly applies to cryptocurrency transactions, which became significantly more common in recent years. If you have tax-related questions about crypto sales, contact a tax lawyer at SF Tax Counsel. The markets for Bitcoin and other forms of cryptocurrency have been volatile, leading many people to sell their crypto investments during 2019. The IRS has provided guidance regarding crypto sales, and these must be reported as capital gains and losses on Schedule D (1040). Despite its name, the IRS treats cryptocurrency as property and not as currency. Therefore, it is reported like sales of stocks, bonds, and real estate. If you…

20Jan 2020 by Anthony Diosdi

Intentionally Defective Grantor Trusts: Estate Planning with Schrödinger’s Cat

tax planning

by James Huang A popular estate planning vehicle for transferring wealth to descendants during one's lifetime is the "intentionally defective grantor trust" (IDGT), also referred to as an “intentionally defective irrevocable trust” (IDIT). Through this type of irrevocable trust, transferors can significantly increase the amount they shield from estate tax upon their deaths. This increase is achieved by virtue of how a trust can simultaneously exist, or not exist, depending on which tax perspective one takes in viewing it. In the case of IDGTs, transfers between the trust and the person (or grantor) who creates it are respected for gift and estate tax purposes, but disregarded for income tax purposes. Income Tax Payments When a grantor transfers property to an IDGT, the grantor "freezes" that property’s transfer date value for…

01Apr 2019 by Anthony Diosdi

Tax Planning for Foreign Individuals That Own U.S. Real Property

tax planning

By Anthony Diosdi As I have discussed in previous articles, nonresident alien domiciliaries are generally subject to U.S. estate tax on his or her U.S. situs assets. The most common example of a U.S. situs asset is U.S. real estate. In this context, it is important to remember that a nonresident alien domiciliary does not benefit from the same “Unified Credit” as a U.S. citizen or resident alien domiciliary. Instead, a nonresident alien domiciliary is only entitled to a $60,000 deduction (equivalent to a $13,000 credit). Because the value of U.S. real estate owned by a nonresident alien domiciliary almost always exceeds this $60,000 “threshold,” the estate of a nonresident alien domiciliary can be subject to a U.S. estate tax on such real estate.In this context, many nonresident alien domiciliary’s…