Summary: The Internal Revenue Service (IRS) does not require that offshore real estate be reported as a foreign financial asset such as a personal residence or a rental property held by an American expatriate or a United States Government employee working overseas. It is only when the real estate is held through a foreign entity that the interest in the entity needs to be specified and reported as foreign financial asset if the total value of all specified foreign financial assets is greater than the applicable reporting threshold. American expatriates and federal government employees working overseas must report any gain realized through the sale of foreign real estate to the IRS. These employees, who own and occupy offshore homes, are taxed the same as having domestic real estate with the exception of depreciation, which must be over 40 years. These taxpayers may claim the principal residence exclusion if they own and occupy their home for at least two years out of the five years prior to its date of sale with certain exceptions allowed. The foreign housing exclusion applies only to amounts paid for with employer-provided amounts, whereas the foreign housing deduction applies only to amounts paid for with self-employment earnings.
In the last 5 years, we have transitioned in wealth management from an estate focus to a Wealth Preservation focus.
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The gross income of United States (U.S.) citizens and resident aliens is taxable on a worldwide basis. In most cases, compensation for personal services such as employer payments for housing expenses is fully taxable as an employee fringe benefit unless specifically excluded from taxation. However, there are exceptions to the taxation of housing allowances such as the special rules for members of the clergy or Peace Corps volunteers.
Common Tax Mistakes 2014 – Review these common mistakes. – Nine Common Tax Mistakes to Avoid
We all make mistakes. But if you make a mistake on your tax return, the IRS may need to contact you to correct it. That will delay your refund.
A 529 is a plan operated by a state or educational institution, with tax advantages and potentially other incentives to make it easier to save for college and other post-secondary training for a designated beneficiary, such as a child or grandchild. Earnings are not subject to federal tax and generally not subject to state tax when used for the qualified education expenses of the designated beneficiary, such as tuition, fees, books, as well as room and board. Contributions to a 529 plan, however, are not deductible.
The trustee must adhere to the trust provisions and the Uniform Trust Code when evaluating investments, distributions, as well as the termination of the trust.
Diversification provides performance while also reducing unsystematic risk. There are two types of investment strategies which are used to provide this diversification: the Prudent Investor Rule or Legal List.
State Tax Rates – Highest and Lowest – The Best and Worst Places to Live in the United States for Income TaxesPosted February 8th, 2014 by George Mentz JD, MBA, CWM, MFP - International Lawyer and Award Winning Author
According to the Federation of Tax Advisors, these 10 states have the highest tax rates on income. These states may have variations of tax treatment for exemptions, credits, retirement, government pensions and varying definition of taxable income. Open to see the 2013 list of worst states to retire or do business.
Same-Sex Married Couples Jointly and Severally Liable for Tax Deficiency and Potentially Innocent Spouse ReliefPosted February 5th, 2014 by Prof. William Byrnes
It appears that same-sex couples that file joint returns are now jointly and severally liable for any deficiency that may be assessed, and by the same token the spouse of the marriage may be eligible to claim innocent spouse relief against a tax liability.