Tax traps for U.S. citizens living and working in Canada

In order to combat tax evasion, the United States has put in place many rules directed at US citizens investing outside the United States. While they might make sense to those who still live in the U.S., these are traps for many US citizens living in Canada, simply doing the sort of things that many ...

Taxation of interests in foreign trusts for US expats

The U.S. income taxation of a foreign trust depends on whether the trust is a grantor or nongrantor trust: In the case of a foreign grantor trust, income is generally taxed to the trust’s grantor, rather than to the trust itself or to the trust’s beneficiaries. In contrast, income from a foreign nongrantor trust is ...

Are TFSAs Trusts Under US Tax Law? 1

Are TFSAs Trusts Under US Tax Law?
This week’s question is a follow-up from last week’s blog post, but comes from Loretta from Quebec, Canada. The question is: So, are TFSAs considered trusts for US tax purposes? If so, what are the implications of that? Is it a trust? Again, here is the regulation defining operating trusts (the US defines 2 other ...

Are RESPs Trusts Under US Tax Law?

Are RESPs Trusts Under US Tax Law?

Using a Split Onshore/Offshore Structure to Avoid US Social Security Tax (#2)

Using a Split Onshore/Offshore Structure to Avoid US Social Security Tax (#2)

Understand Form 5471 and Controlled Foreign Corporations (CFC)

Understand Form 5471 and Controlled Foreign Corporations (CFC)
Greetings, This week’s question comes from a doctor in Canada who as asking about the implications of his corporate structure. Based on the advice of his Canadian accountant, he created a Canadian corporation known as a ‘Canadian-Controlled Private Corporation’ (CCPC) through which he operates his medical practice. More… Taking a Stroll Down Memory Lane Once ...

Resourcing of business profits from Seattle

Resourcing of business profits from Seattle
Hello from the Amtrak Cascades, This is Olivier Wagner from 1040 Abroad. I am on my way Pioneer Nation in Portland, OR. If you are going to Pioneer Nation, let me know, I’ll buy you a drink, also I’ll be in DCBKK (Dynamite Circle conference in Bangkok), same deal, let’s meet up. This post is a continuation of ...

What is form 5471? (and a Controlled Foreign Corporation)

What is form 5471? (and a Controlled Foreign Corporation)
Form 5471 is used by shareholders of foreign corporations. Several categories are required to report their ownership, starting with an acquisition of a minimum of 10% of the stock of a foreign corporation. But the most relevant is the reporting for Controlled Foreign Corporation (Category 5). What is a Controlled Foreign Corporation? Until the CFC ...

Trailing Nexus

Hi, I’m going to go beyond my previous topics with this post covering Nexus. This will be applicable to those engaged in a trade or business in the United States, so corporations or self-employed people. For income tax purposes, those based in treaty countries can avoid taxation provided that they don’t have a permanent establishment ...

Tax cliff and Controlled Foreign Corporations (CFCs)