Tax & Accounting Blog

Residency for Tax Treaty Purposes for Individuals Part 3: The Savings Clause Exception

Residency for Tax Treaty Purposes for Individuals Part 3: The Savings Clause Exception

Because the United States imposes worldwide taxation on its citizens and immigrants (popularly called green-card holders), all U.S. tax treaties include a provision commonly referred to as a savings clause because it saves the right of the U.S. to tax its citizens and residents wherever they reside in the world. For example, Article 1(4), General Scope, … Read More

Residency for Tax Treaty Purposes for Individuals Part 2: Eligibility for Treaty Benefits

Residency for Tax Treaty Purposes for Individuals Part 2: Eligibility for Treaty Benefits

Eligibility for tax treaty benefits in the first instance is based on an individual’s tax residency status (not citizenship) in the treaty country. The timing of tax residency in the treaty country varies with the treaty article providing the benefit. Most treaty benefits require an individual to be a tax resident of the treaty country at the … Read More

Residency for Treaty Purposes for Individuals – Part 1

Residency for Treaty Purposes for Individuals – Part 1

The United States has income tax treaties with over 60 countries for the primary purpose of avoiding double taxation. Double taxation occurs when an individual’s country of residence (or citizenship, in the case of U.S. citizens) taxes an individual on worldwide income and the country where income is derived also taxes the individual’s income, typically by … Read More

Partners and Details Firming around FATCA

Partners and Details Firming around FATCA

Foreign financial institutions and governments might initially have groaned when the U.S. Congress passed the Foreign Account Tax Compliance Act in March 2010, but it looks like at least some of them are starting to come around. In February, the U.S. Treasury announced it had partnered with five European nations — France, Germany, Italy, … Read More

New Cost Basis Rules May Be Lost on Many

New Cost Basis Rules May Be Lost on Many

With taxpayers in the throes of planning their 2011 income tax returns, now’s a good time to remind filers not to overlook new cost basis reporting rules governing securities sales. In the past, they had the option of specifying which shares they sold when computing their cost basis. But as of 2011, taxpayers’ account custodians … Read More