Santa taxation

Santa taxation
Merry Christmas everyone. So, now the topic that all the good boys and girls were waiting for:   * Is that that thing that you found under the Christmas tree taxable income? This reminds us of the court case of Cesarini v. United States: taxpayer found cash in a piano. Besides the timing issue addressed ...

The Vatican Bank, Christmas Cheer, And FATCA

As seen at http://www.forbes.com/sites/taxanalysts/2014/12/24/the-vatican-bank-christmas-cheer-and-fatca/ For centuries the inner workings of the Vatican Bank have been cloaked in secrecy. That was before Pope Francis, who has pledged to restore public confidence in the administration of the Roman Catholic Church. This week we learned the United States and the Holy See have brokered a FATCA agreement for the ...

PFIC update on Canadian mutual funds

Not an update in that the rules didn’t change, just an update in my reasoning. After reading the private ruling letter #200752029, my opinions tilts even towards the idea that Canadian mutual funds are not corporations and as such the PFIC rules shouldn’t apply to such investments. Following the logic presented in the private ruling, absent ...

Form 8938 not required for those non-residents by virtue of a treaty positions

As a way of background, until now, non-residents who didn’t meet the substantial presence test, were exempted individuals (form 8843) or used a closer connection exemption (form 8840) didn’t have to file form 8938 (the FATCA version of the foreign asset reporting, often seen as duplicative version of the FBAR’s Fincen 114). Those who were non-residents by ...

A child’s tax return, the kiddie tax and the Net Investment Income Tax

A child's tax return, the kiddie tax and the Net Investment Income Tax
Hi, I previously wrote about the filing obligation of dependents at Filing obligation of a 6 year old, with the key points being that: * A dependent would have to file with income as low as $1,000 (if all such income was unearned) due to reduced standard deduction for dependents. * The regular FBAR rules ...

The myth of the US Foreign Earned Income Exclusion

Recently, Paul Delean of the Montreal Gazette wrote an article about the benefit of the US Foreign Earned Income Exclusion and how it may be used to remove the tax obligations of US Citizens living in Canada. Unfortunately, this article continues to promote the fictional view that this is a good thing. Most people think that chopping $90,000 of ...

Filing obligations for foreigners living in the United States

Are you a “US person”? The Internal Revenue Code would apply to you the same way it applies to US citizens if you are a “US person” (IRC 7701(a)(30) – and we’re looking at IRC 7701(a)(30)(A) in particular for what a “resident of the United States” is). You would be a US person if you ...