Transfer tax and foreign items adjust for inflation in 2021

Transfer tax and foreign tax figures are among those that are adjusted annually for cost-of-living increases. Thomson Reuters Checkpoint has calculated these figures for the year 2021 using the chained Consumer Price Index from August 2020. Don’t miss: Reasonable compensation for S-Corporation shareholder employees The annual gift tax exclusion will remain at $15,000 and the …

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Taxes and international boycott operations

U.S. taxpayers who have operations in, with, or related to certain countries participating in boycotts not sanctioned by the U.S. government may be required to report such operations to the IRS. Willful failure to file may result in large penalties, including $25,000 and/or imprisonment. Don’t miss: International tax reform update As of October 10, 2019, …

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Claiming treaty benefits

The United States has income tax treaties with many foreign countries. A treaty has benefits in that they may reduce the U.S. income tax of a resident of a foreign country. The reduced tax rates or exemptions vary between each country and each type of income. Don’t miss: IRS releases FAQ’s for sick foreigners claiming …

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Foreign gift reporting requirements

Generally speaking, the United States imposes gift tax on all gifts above a certain threshold. In other words, the reporting of a foreign gift must meet a certain threshold to be taxable. But in general, in the case of a nonresident and not a citizen of the United States, gift tax shall apply to a …

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BE-10 survey for holders of foreign assets

The Bureau of Economic Analysis (BEA) collects data of U.S. owned foreign investments by issuing confidential yet mandatory surveys and collecting data. This data provides Congress and U.S. businesses useful information for making informed decisions. The BE-10 survey is conducted once every five years and is coming due on May 29, 2020.  The BE-10 is …

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Joint Chiefs of Global Tax Enforcement

The Joint Chiefs of Global Tax Enforcement, known as the “J5”, are cracking down on international tax evasion and criminal activity. The J5 is made up of a group of investigators from Australia, Canada, the UK, US and the Netherlands. The group formed in mid-2018 and has been actively focused on bringing down worldwide tax …

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Final regulations on the foreign tax credit

The IRS has issued final regulations pertaining to the foreign tax credit, which incorporates changes due to the Tax Cuts and Jobs Act (TCJA). The new regulations may be found here. The TCJA had a major overhaul in the way U.S. taxpayers doing business overseas are taxed. As such, the foreign tax credit, which is …

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IRS international inflation adjustments for 2019

The IRS released Rev. Proc. 2018-57 to provide certain international inflation adjustments for 2019. Here is a summary of the adjustments relating to international areas of tax, including the prior year for comparison. Please consult your Henry+Horne tax professional for questions or assistance with your international tax needs. This information is general and should not …

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Tax reform: deducting foreign real estate taxes

One notable change from The Tax Cuts and Jobs Act of 2017 (TCJA) was the limitation of the state and local tax deduction on Schedule A. For those itemizing deductions, the maximum deduction allowed is capped at $10,000 per year, effective on your 2018 tax return. This includes taxes such as real estate tax, personal …

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