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Planning impact of new expatriation and foreign trust tax rules

Article Abstract:

The 1996 Small Business Job Protection Act and the Health Insurance Portability and Accountability Act include provisions impacting tax treatment and income reporting by foreign trusts and by expatriates and long-term US resident aliens. These long-term residents are considered expatriates under the revised statutes and must file expatriation statements required of all expatriates. Revised source rules affecting previously exempted funds and a special ruling procedure are also applicable in many situations. Foreign trusts and residence reporting rules, along with grantor/beneficiary taxation, are similarly affected by these changes.

Trusts, Funds, Trusts, and Other Financial Vehicles, Aliens, Methods, Estate planning, Foreign source income taxation, Expatriation, international

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Domicile is key in determining transfer tax of non-citizens

Article Abstract:

A lack of statutory guidance regarding the establishment of domicile for non-US citizens in inheritance and transfer tax situations forces planners to carry out a substantial due diligence inquiry when domicile is uncertain. Factors to consider include time spent in the US, locations of family, friends, service providers, and religious and social activities, the use of driver's licenses and the location of the person's investments. Other factors include car ownership, business interests and bank accounts, houses and prior tax payments.

Analysis, Transfer taxes, Domicile in taxation, Domicile (Taxation)

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Final regs. provide more guidance on the residence of trusts

Article Abstract:

The author discusses Internal Revenue Service regulations, issued in 1999, which set forth a test for determining the residency of a trust as either domestic or foreign for federal tax purposes. Topics include the safe harbor rule, automatic migration provisions, and domestic trust elections.

United States, International, Safe harbor (Taxation)

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