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NEWS & UPDATES

A single member LLC is considered a “disregarded entity” for U.S. tax purposes, and accordingly its operations are reported on the member’s individual tax return.  Where a single member LLC is owned by a non U.S. person or entity, new regulation 301.7701-2(c)(2)(vi)(A) classifies these entities as corporations.  This triggers Internal Revenue Code section...

Do you have any other USA source income or tax withholding in the current year? Has a US payer, such as a casino, a bank or financial institution withheld tax on payments to you (such as interest, dividends or winnings and possibly issued you a Form 1042-S or Form 1099)? In many cases the US payer over-withholds because you’re often entitled to a treaty b...

Why is basis of gift reported on 709?

The form is trying to determine the Adjusted Basis (purchase price plus improvements minus adjustments such as depreciation) vs the Fair Market Value on the date of the gift. Recipients generally are not entitled to a stepped up basis in the gift.

To figure out the basis of property you receive as a gift, you must know...

IRS offers two higher-education tax credits. The American Opportunity Tax Credit provides up to $2,500 worth of credit for each student, 40% of which is refundable. The credit is equal to 100% of the first $2,000 of college tuition and qualified expenses and 25% of the next $2,000. The AOTC only applies to the first four years of post-secondary education.

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Does a Canadian or American need a driver’s license number to file an IRS 1040 or state income tax return?

For Canadians while the underlying reason for needing one is moot in most cases, the tax preparation software is foremost designed with American taxpayers in mind. Thus, tax software will ask in the general profile set-up for a driver’s license number...

https://www.cbc.ca/news/politics/taxation-canada-u-s-irs-1.4025880

https://globalnews.ca/news/3309306/u-s-sues-vancouver-dual-citizen-for-over-1m-for-not-reporting-accounts/

The U.S. Justice Department is suing a Canadian resident for the equivalent of $1.1 million Cdn, for failure to file FBAR. He did file his income tax returns with IRS. He prepared his o...

New Jersey new budeget legislation provides for a new amnesty program for 2009-2017 tax liabilities:

  • Period to participate: The Division of Taxation will announce a ninety-day period for taxpayers to participate in the amnesty.  The period to enter the amnesty program will end on or before January 15, 2019.

  • Term: For taxes due on and after Fe...

July 8, 2018

Because our practice is located outside the USA in Toronto Canada, we see many return refund claims of over-withholding amounts such as on real property sales (FIRPTA), foreign partner of USA partnership (8805), USA casino or financial institution (1042-S) and the like.

It is imperative for the taxpayer to ensure and check with and about the withholding ag...

Form 8938 serves a different purpose than FBAR. The purpose of Form 8938 is to facilitate compliance with FATCA and is part of the tax return, while the FBAR was designed to aid in law enforcement. FBARs can be and are shared among governmental agencies and are used primarily by the Treasury Department's Financial Crimes Enforcement Network to track and c...

FOREIGN ENFORCEMENT QUESTIONNAIRE – SSA 7161, SSA 7162

The Social Security Administration contacts beneficiaries outside the United States annually or biennially to verify their current status if they have a foreign address on record. The purpose of the FEQ is to determine if benefits should be deducted, suspended, or terminated.

  • SSNs ending in 00-49 ar...

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