Capital investments in a business generally must be deducted piecemeal over many years rather than immediately deducted against business income the year they were made.  With proper planning and filing, the length of time over which expensive new property must be depreciated can be reduced or eliminated.  Accelerated depreciation, and sometimes 100% bonus depreciation under ... [Read more]

U.S. taxpayers who work and pay income taxes abroad often receive credits on U.S. taxes for amounts paid to the foreign tax authority. When the foreign jurisdiction refunds some of that money, the taxpayer must report the refund and pay taxes on it to the U.S. Although there may be some doubt about ultimately keeping ... [Read more]

U.S. taxpayers who control foreign businesses must remain vigilant with regard to many responsibilities, including the often-overlooked duty to file informational returns. Four different kinds of taxpayers must inform the IRS of their income and expenses from their ownership of foreign businesses by filing Form 5471 with their annual 1040s. The price tag for failing ... [Read more]

As an entrepreneur looking to invest capital in a startup, it is important to decide whether such contributions will be loans or if they are actually purchases of ownership interests in the company.  A decision to lend must be contemporaneously documented.  The lender should act as a lender from then onward.  For instance, he or ... [Read more]

Foreign Corporation Tax On US Partnership Liquidation

Foreign corporations with U.S.-sourced income are subject to U.S. taxes on gain earned in the ordinary course of their U.S. operations and when a U.S. office location is a material factor in the production of that gain.  In what circumstances will the Tax Court find this has occurred, and does it apply equally to all ... [Read more]