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I am an American and I live in Switzerland. Am I entitled to a
credit on my Swiss taxes?
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 No. I assume your question is whether you are
entitled to a foreign tax credit (taxes paid in the U.S.) when you file your Swiss tax
return. As a U.S. citizen, you are taxed on your world-wide income, however, you are
entitled to a foreign tax credit on your U.S. tax return for taxes paid to
Switzerland. This credit has limitations and you must declare the full income earned
in Switzerland on your U.S. tax return. Instead of claiming the Swiss income and a foreign
tax credit for Swiss taxes paid, you may elect to exclude $76,000 in income when computing
your U.S. taxes if you remain outside the U.S. for at least 330 days during a 12-month
period. You'll still have to pay any taxes the foreign country levies on you.
Check out my March, 2001 Hot Topics which has a link to an IRS booklet for Americans
working abroad.
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If I have early exercised ISO stock and held on to it more than 12
months, can I get long-term capital gains, even though it has not been 24 months from the
grant date yet?
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It could depend on whether you early exercised and made a Sec 83(b)
election - but in general, the answer is no. You must not sell the stock within 2
years from the date the option was granted to you. If you filed a Sec. 83 (b)
election, then your ordinary income gain will be considered a “disqualified
disposition,” but your ordinary income would be limited to the spread between the
exercise price and the fair market value of your stock on the date of exercise.
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To defer capital gains on a real estate investment may I enter into a "like
exchange" going from a 3-story apartment house to a REIT (real estate investment
trust"?
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No. The like-kind exchange rules of IRC Sec. 1031 apply when you exchange
investment property for property of a like kind which is held for investment. The
rules do not apply to stocks, bonds, notes, beneficial interests or securities. An
interest in a REIT would either be a security or a beneficial interest in a trust, both of
which are prohibited under IRC Sec. 1031.
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My
parents gifted undeveloped land to my sister and me (50/50) in 1993. We sold the
land in 2000 and netted $34,000. How do we calculate our tax.
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With gifts, you take
over the basis that your parents had in the property. Thus, the difference between
$34,000 and your parent’s basis in the property is gain to you. In contrast, if
you inherited the property, then you would be entitled to use the fair market value at the
decedent’s date of death value (or 6 months later under some circumstances) as your
basis.
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In February, 1999, I purchased a house with owner financing, I have
never received a 1098 for 1999 or 2000 from the mortgage holder despite my request.
How can I claim my home mortgage deduction without a 1098 statement from the sellers?
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Just claim the deduction and use your cancelled checks or other proof of payment as
evidence in case you are audited. You should also have retained a copy of the
purchase agreement and the promissory note (or debt obligation). |
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How
do the rules for a "Temporary assignment in an area other than where you have a
residence" apply to US Service members?
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These payments sound like they were made as
salary and salary-related and, therefore, would be considered taxable wage payments.
However, I believe that there is a set of laws that applies to servicemen working
overseas. I'm not completely sure of this. Check out IRS Publication 3 which
deals with Armed Forces. I have a link to the publication (which is interactive and
easy to use) listed in my March, 2001 Hot Topics.
| See Also: The IRS Publication dealing with the
taxation of U.S. Armed Forces Publication 3 |
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Credit for Swiss
Taxes
