U.S. citizens and U.S. tax residents (“U.S. Persons”) are taxed in the United States on their worldwide income no matter where in the world they reside. The U.S. taxes based on citizenship, which is different than almost all other countries in the world that tax based on residence.
The income of a foreign corporation is not subject to federal corporate income tax unless the foreign corporation has income that is effectively connected with a U.S. trade or business (or permanent establishment as provided in an applicable tax treaty) or consists of certain types of U.S. source fixed …
Exiting a domestic C corporation triggers double taxation: the entity faces a 21% federal corporate tax on asset sales during liquidation, while shareholders pay up to 23.8% on dividends or capital gains from distributions. Converting to an S corporation or qualifying for Qualified Small Business Stock (QSBS) exclusions—up to $10 million after five years—can significantly reduce or eliminate these tax burdens.
Wealthy international families are choosing U.S. situs trusts over the typical offshore trust jurisdictions. In choosing a trust jurisdiction, the extremely wealthy seek the best security, most privacy, best income, lowest taxes, and lowest costs. While the extremely wealthy often utilize these trust structures, they are in no way limited to the extremely wealthy and are often used by high-net-worth individuals (i.e., more than a million in assets). For many, it is also important to diversify their asset holdings outside their country of residence. Powerful trust laws, tax savings, asset protection and privacy, as well as solutions to political and regulatory concerns, all combine to make the U.S. the trust situs of choice.
Qualified Small Business Stock (QSBS) can offer one of the most significant tax benefits available to founders, investors, and early-stage company shareholders but only if strict eligibility requirements are met. From entity structure and asset thresholds to holding periods and business activity tests, a single mistake can jeopardize the potential capital gains exclusion. In this article, Christopher Klug outlines the key QSBS rules, common pitfalls, and planning considerations to help businesses and investors maximize this valuable tax opportunity.
This is Part 2 of the newsletter on charitable remainder unitrusts (“CRUT”) which is a common planning technique for the charitably inclined high net worth family. As compared to immediate taxation on the gain on the sale of a highly appreciated asset with after tax proceeds being subject to tax annually, the CRUT can allow for superior returns where the distributions to the lifetime beneficiaries will…
A charitable remainder unitrust (“CRUT”) is a common planning technique for the charitably inclined high net worth. The CRUT allows for the tax-free liquidation of a highly appreciated asset, the tax-free growth of the assets inside the CRUT, with the income building inside the CRUT being taxed to the extent of distributions to the lifetime beneficiary. As compared to immediate taxation on the gain on the …
On February 27, 2023, the Supreme Court of Finland set a new precedent (KKO:2023:15) in their ruling concerning the application of penalties for tax evasion (tax fraud), when private individuals fail to report investment income from foreign sources on their Finnish income tax returns.
With the global economy we live in, it is important for Fund Managers to have an appropriately structured fund if they plan to have foreign investors. Too often, the fund structure is not tax efficient for the foreign investor. If the fund is not structured to accommodate foreign investment, why should a foreign investor consider investing in the fund?
CFOs and General Counsel of multinational corporations (non-U.S. parent) with operations in the United States face complex tax implications that must be planned for on a global basis and not make decisions solely based on the U.S. tax implications. Too often, the U.S. advisor will ignore the tax …
CFOs and General Counsel at U.S. multinational corporations are confronted with complex international tax that requires comprehensive global tax planning to reduce the global effective tax rate. Without a comprehensive strategy that considers not only the tax implications of the country where …
The after-tax proceeds of the sale of a business is of the utmost importance to sellers. Too often sellers agree to holdbacks or a reduction in purchase price for alleged tax issues raised by the purchaser during due diligence where the purchaser bears no actual risk.
