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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