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I am an expatriate US citizen, cruising the South Pacific on my boat.
The money from a house I own in the US is just starting to earn sizable capital gains.
Should I file a return now, and get back on the US computers? How hard is it for IRS to
gain access to information on offshore investments with foreign institutions?
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 If you are
truly an expatriate - usually someone who renounces U.S. citizenship -- then there is a
full set of rules that apply. Earning capital gains does not make sense to me. If you sell
a property, you receive a capital gain or loss. Rents are continuous in nature and
represent ordinary income, not capital gains. You need to report a capital gains sale,
even if you have not filed taxes for years.
IRS is cracking down on off-shore accounts and has several ways to detect them, mainly
through credit or debit card transactions, but also under agreements with certain foreign
countries and sometimes with banks themselves. If you have more than $10,000 in one or
more foreign bank accounts at anytime during the year, you are required to report it.
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Are there tax consequences when a foreigner receives stock dividends from a U.S.
corporation?
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Dividends from a U.S. company are considered U.S.-source income and are
subject to a flat 30% tax which is collected through withholding and payment to IRS by the
corporation paying the dividends.
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My father, a non-resident alien, wants to help me
financially with the purchase of a new home. If he gifts me money for the home, are there
gift tax consequences?
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Yes. Because the gift is specifically earmarked for the purchase
of U.S. real property, the transfer is considered a gift of U.S. real property (which is
subject to gift tax) rather than an unrestricted gift of cash by a non-resident alien
(which is not subject to gift tax). In your case, you need to make sure the funds are not
tied to real estate investments in the U.S.
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I've sustained a loss in
a 401(k) plan, similar to what happened to Enron and Kmart employees. Is there any way
these losses can be deducted on a tax return?
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No. Gains and losses generated within
retirement plans are not subject to taxes, which means you do not pay taxes on the gains
or receive tax deductions for losses. Your best option is to sue your employer for breach
of fiduciary duty regarding the administration of the plan. |
Expatriate with U.S. Rental Income
