Income Tax Consideration of Property Inherited from a Foreign Individual

Income Tax Consideration of Property Inherited from a Foreign Individual

Tax Law
By Anthony Diosdi Many U.S. income tax questions arise in connection with the receipt of inherited property. These questions generally include whether the recipient must include the value of such property in gross income for U.S. tax purposes and what will be the U.S. income tax consequences of the recipient’s subsequent disposition of the inherited property. This article will briefly summarize the more relevant U.S. income tax consequences in connection with inherited property with emphasis on property inherited from a foreign individual. Although the U.S. has a transfer tax regime that could impose an estate tax upon the transfer of the property of a decedent, the estate tax is generally imposed on the estate of a decedent and not on the recipient. However, the estate tax generally reduces the value…
Read More
Caution- The 2019 Calendar Year Has Yet Another International                                   Return Requirement

Caution- The 2019 Calendar Year Has Yet Another International Return Requirement

tax planning
 By Anthony Diosdi Individuals with foreign assets are subject to never ending informational return requirements. This tax year there is yet another international reporting requirement. Form BE-10 is a benchmark survey from the Bureau of Economic Analysis (“BEA”) which is under the United States Department of Commerce. The BE-10 is conducted every five years and is designed to collect information for all U.S. direct investments abroad from both large and small entities. The BE-10 treats all individuals as entities or companiesThe 2019 calendar year is a “Benchmark Year.” This means if you or a business that you own conducts any business outside the United States or holds assets outside the United States, you may be required to file a BE-10. Unlike FBAR informational returns, there is no $10,000 threshold. The…
Read More
The IRS Delays the Filing Deadline from April 15th to July 15th

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

tax planning
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.…
Read More
The IRS Has Deferred 2020 Income Tax Payments by 90 Days. What Happens in 90 Days?

The IRS Has Deferred 2020 Income Tax Payments by 90 Days. What Happens in 90 Days?

Tax Law
By Anthony Diosdi Treasury Secretary Steven Mnuchin recently announced that the Internal Revenue Service (“IRS”) is deferring income tax payments for the 2019 tax year by 90 days. Steven Mnuchin says that taxpayers will not be assessed interest and penalties on the late payments. According to Mnuchin, individuals can defer up to $1 million in federal taxes. Businesses can defer up to $10 million in federal taxes. The deferral is only available for tax payments. It does not permit the deferral of payroll taxes or estate and gift taxes. The announcement also does not impact estimated tax payment requirements. As of now, the income and corporate tax filing deadlines still have not pushed back. Although the announcement this is a step in the right direction. It does not go nearly…
Read More
Violation of a Temporary Visa and the Possible Effect on “Domicile”

Violation of a Temporary Visa and the Possible Effect on “Domicile”

Tax Law
By Anthony Diosdi As discussed in previous articles, the determination of an individual’s residency status for U.S. income tax purposes is different than the determination of an individual’s residency status for U.S. estate and gift tax purposes. A U.S. citizen or a resident alien is subject to U.S. income tax on his or her worldwide income. An individual becomes a resident alien by violating the so-called “substantial presence test” or obtaining lawful permanent resident status (obtaining a Green Card). A nonresident alien is subject to U.S. income tax on certain passive income that is sourced in the United States and income that is effectively connected with the conduct of a U.S. trade or business. A U.S. citizen or a resident alien domiciliary is subject to U.S. estate and gift tax…
Read More
Income Tax Considerations of Property Inherited from A Foreign Person

Income Tax Considerations of Property Inherited from A Foreign Person

Uncategorized
By Anthony Diosdi Many U.S. income tax questions arise in connection with receipt of inherited property. These questions generally include whether the recipient must include the value of such property in gross income for U.S. income tax purposes and what will be the U.S. income tax consequences of the recipient’s subsequent disposition of the inherited property. This article will briefly summarize the more relevant U.S. income tax consequences in connection with inherited property with emphasis on property inherited from a foreign individual. Anyone reading this article must be aware that the U.S. also has a transfer tax regime that could impose an estate tax upon the transfer of property of a decedent. However, the estate tax is generally imposed on the estate of a decedent and not on the recipient.…
Read More