Tag Archives: Federal Tax

Local Law Shopping Through “Derivative Benefits”

Unlike U.S. persons who are subject to U.S. federal income tax on their worldwide income, foreign persons generally are subject to U.S. taxation on two categories of income: (i) certain types of passive U.S.-source income (e.g., interest, dividends, royalties and other types of “fixed or determinable annual or periodical income,” collectively known as FDAP), which … Continue Reading

Synthetic Investment in U.S. Real Estate by Foreign Investors

According to recent reports, foreign investment in commercial U.S. real estate exceeded $38.7 billion in 2013 – a 40 percent increase over 2012. Leading the way in 2013 were investors from Canada, China, Australia, Germany, and Singapore. This represents a dramatic increase from the 2009 collapse of the U.S. real estate markets, which caused foreign investments … Continue Reading

Check-the-Box Elections: Relevance in the International Context

One of the most powerful tools in cross-border tax planning is the ability to make a “check-the-box” election.  Pursuant to the entity classification regulations under Internal Revenue Code §7701 (the “check-the-box regulations”), certain business entities are permitted to choose their classification for U.S. federal income tax purposes by making a check-the-box election. The Federal tax … Continue Reading

Retroactive Tax Planning

Converting Subpart F Income into Qualified Dividends U.S. shareholders of foreign corporations are generally not subject to tax on the earnings of such corporations until the earnings are repatriated to the shareholders in the form of a dividend.  Moreover, when a foreign corporation is resident in a jurisdiction with which the United States has a … Continue Reading

Tax Planning for the Privatization of the Space Industry

The privatization of the space industry has seen dramatic growth in recent years, and it appears that more significant developments are on the horizon. During 2013, SpaceX (the space exploration company founded by Elon Musk, co-founder of PayPal and Tesla Motors) successfully launched a major communications satellite into orbit for a private satellite operator, and became … Continue Reading

Determining Foreigners Insolvency Exception

Can a foreign person exclude foreign-situs assets in determining insolvency exception to cancellation of indebtedness income? With the worldwide global default rate on corporate debt continuing to rise, a taxpayer’s ability to exclude cancellation of indebtedness income from gross income has become increasingly relevant.  This remains true for foreign persons who are also subject to … Continue Reading
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