tax planning Archives | SF Tax Counsel

09Feb 2023 by Pat Geddie

Tax Planning Tips for Couples Involved in a Cross-Border Divorce

By Anthony DiosdiIf you are divorcing or recently divorced, taxes may be the last thing on your mind. However, a divorce, in particular a cross-border divorce, may have a big impact on your finances. This article discusses some key tax tips to keep in mind if you are divorcing or recently divorced and you held assets located in the U.S. and abroad with your spouse.Understand the Changes to the Tax Treatment of Alimony and Separation PaymentsPrior to the enactment of the 2017 Tax Cuts and Jobs Act, if a spouse made payments under a divorce or separate maintenance decree or written separation agreement, the spouse was able to deduct them as alimony. This applied only if the payments qualified as alimony for federal tax purposes. If a spouse received alimony…

01Jul 2020 by Pat Geddie

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…

10Jun 2020 by Pat Geddie

The Top Five Tax Planning Opportunities and Pitfalls that Should be Considered Before Contributing Stock of a CFC to a Holding Corporation to Reduce the U.S. Tax Liability on GILTI

tax planning

By Anthony Diosdi Internal Revenue Code Section 951A requires US shareholders of a controlled foreign corporation (“CFC”) to include the corporation’s income determined to be in excess of specified return on investment in depreciable tangible personal property (i.e., GILTI). For most purposes, a GILTI liability operates for tax purposes in a similar manner as a subpart F inclusion. However, unlike subpart F income, GILTI was intended to impose a current year tax on income earned from intangible property subject to no or a low tax rate outside the US. GILTI is defined as the residual of a CFC’s income (excluding subpart F income or income that is effectively connected with a US trade or business) above a 10 percent return on its investment in tangible depreciable assets (defined as “qualified…

31Mar 2020 by Pat Geddie

Tax Deadlines for 2020

tax planning

If you thought that filing taxes in 2019 was a confusing process, the situation is not much simpler in 2020. With the COVID-19 pandemic sweeping through the U.S. and the world in the early months of the year, the Internal Revenue Service (IRS) has made adjustments to filing deadlines. The following is an overview of tax deadlines in 2020. Filing Date Extended First and foremost, the IRS has extended the standard tax filing date from April 15 to July 15, 2020. This means you do not have to file your federal returns until July, and you will not be charged interest on payments until after July 15. This can help many people who might owe taxes but are facing financial hardship due to temporary job loss or a decline in…

12Mar 2020 by Pat Geddie

The Trump Administration will Likely Delay the April 15th Tax Filing Deadline in Response to the Coronavirus Outbreak

tax return

By Anthony Diosdi The Wall Street Journal recently reported that in response to the coronavirus outbreak the Trump administration will most likely delay the deadline for filing individual income tax returns. At this point it is unclear how long the deadline would be extended or who would be eligible to delay the filing of their tax returns. The Trump administration plan may also waive penalties associated with not timely filing tax returns, penalties associated with not timely paying taxes, and interest associated with not timely paying tax liabilities. The details of this Trump administration’s plan are still being worked out. As more details are available, we will write a complex article discussing the details of the plan. Anthony Diosdi is a partner and attorney at Diosdi Ching & Liu, LLP…

13Jan 2020 by Pat Geddie

Is 2020 the New 2018 for Estate, Gift, and Generation-Skipping Tax Purposes?

Gift Tax

By Anthony Diosdi This year may be a very busy year for estate and gift tax planning professionals. This is because this year is somewhat reminiscent of 2012. In 2012, the Economic Growth and Tax Relief Reconciliation Act of 2001 was scheduled to expire. The Economic Growth and Tax Relief Reconciliation Act excluded $5,120,000 from estate and gift taxes, and the generation-skipping transfer taxes (“GST”). The expiration of the Economic Growth and Tax Relief Reconciliation Act would have resulted in the tax exemption for estate and gift taxes, and the GST reverting back to only $1 million. Any estates valued over $1 million could have been subject to estate and/or gift tax of up to 55 percent. Fortunately for many American families, President Obama signed the American Taxpayer Relief Act…

06Jan 2020 by Pat Geddie

Tax Return Changes for 2020

tax return

Every year, certain states or the IRS might make changes that impact the tax returns of certain households or businesses. The following are brief overviews of some changes taking place for 2020. Adjustments for Inflation Tax laws are adjusted based on inflation, and recent adjustments that will impact your returns include an increase in standard deductions ($200 for individual filers and $400 for joint returns), two percent increases in tax brackets, and an increased alternative minimum tax exemption. New Forms for Seniors In the past, people over the age of 65 used the same tax forms as younger adults. This year, the IRS has a new form for seniors over 65, which is the 1040-SR. This form has no maximum income limit, and it looks more like the older 1040A…

01Apr 2019 by Pat Geddie

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…

28Mar 2019 by Pat Geddie

Establishing a Residency Termination Date For Tax Planning Purposes

Uncategorized

By Anthony Diosdi An alien individual who is a United States resident alien for income tax purposes, but who is a nonresident alien for United States income tax purposes during the following year, will cease to be a resident alien on the individual’s “residency termination date.” Generally, the residency will be the last day of the calendar year.However, the residency termination date for a resident alien will be the last day such an individual is present in the United States during the calendar year if such individual establishes that, for the remainder of the calendar year, the individual’s tax home was in a foreign country and he or she maintains a closer connection to that foreign country rather than to the United States. To qualify for this exception, a statement…