Beginning in tax year 2018, IRS partnership tax audit adjustments will be assessed at the partnership level, not the partner level, and the partnership will owe the tax, penalties and interest.Read More
For foreign investors to make the best use of ever-evolving U.S. tax laws, which got a major overhaul in 2017 with the passage of the Tax Cuts and Jobs Act, proper tax planning, tax projections and documentation are all required.Read More
Transfer pricing is a term to describe methods of pricing transactions between related entities located in different countries. Transfer pricing is one of the focused campaigns at the IRS Large Business and International (“LB&I”) Division.Read More
The US taxes foreign non-resident individuals and foreign entities on two type of income. First, effectively connect income (ECI) is active business income that is subject to US income tax.Read More
Purpose of Form 5472 In transactions between unrelated third parties, the prices charged between the parties is controlled by market forces. However, with transactions between related parties, there is no corresponding conflict of interest between the parties to ensure that market prices are used. The IRS developed Form 5472 to…Read More
IRS interim guidance on the tax treatment of disallowed earnings stripping interest to inbound foreign investors in United States real estate
The Tax Cuts and Jobs Act (“TCJA”) changed the law on the deductibility of interest expense for foreign inbound investors in United States real estate. Prior to the TCJA, the tax law had a provision called the earnings stripping rules. These were intended to prevent related parties from using excess…Read More
By Brad Wagner, CPA. Wagner, Duys & Wood, LLLP, Bethesda, Maryland Foreign inbound investors in U.S. real estate anticipate owing Federal income tax on the profits from the rental and sale of their properties. However, many do not realize that there are state and local taxes that will be incurred. This…Read More
In December 2017, Congress passed the Tax Cuts and Jobs Act (“TCJA”) and the President signed it into law on December 22, 2017. The tax act has made significant changes that affect foreign investors in United States real estate (“FIRPTA”) utilizing the blocker corporation structure.Read More
United States Department of Commerce Statistical Forms for Foreign Investors in United States Real Estate (FIRPTA)
If a foreign investor acquires at least a 10% voting control of a United States commercial real estate property, in addition to income tax filings, they will be required to file information forms with the United States Department of Commerce, Bureau of Economic Analysis (“BEA”). These reports filed by the…Read More
PRESIDENT TRUMP SIGNS INTO LAW CARES ACT On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security (CARES) Act, which provides relief to taxpayers affected by the novel coronavirus (COVID-19). The CARES Act is the third round of federal government aid related to COVID-19….Read More
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