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Welcome to Wagner, Kaplan, Duys & Wood LLP

We’re thrilled to share that as of January 1, 2024, Wagner, Duys & Wood, LLLP, and Kaplan Company, P.C., have merged to create Wagner, Kaplan, Duys, & Wood LLP. This merger combines our expertise and resources, enhancing our ability to serve our clients in the tax and financial sectors. Our…

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FIRPTA Investors Face Important Choices Under New Partnership Tax Audit Rules

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.

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FIRPTA Planning: Understanding the Income Tax Consequences of Blocker Corporation Distributions

­­­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.

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Transfer pricing for inbound loans to a US blocker corporation

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.

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Withholding exemptions to cross border interest payments

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.

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Why IRS requires 25% foreign owned blocker to file IRS Form 5472

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…

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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…

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Foreign Real Estate Investors Must Consider All US Taxes

By Brad Wagner, CPA. Wagner, Kaplan, Duys, & Wood, LLP, 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….

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TCJA Will Affect Foreign Investments In US Real Estate

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.

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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…

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