[an error occurred while processing this directive] [an error occurred while processing this directive] April 2001   [an error occurred while processing this directive] [an error occurred while processing this directive]   Credit for Swiss Taxes
  Sale of ISOs
  Sec 1031 and REITs
  Basis for Gift of Land
  Documenting Mortgage Deduction
  Temporary Assignment for Service Members
[an error occurred while processing this directive][an error occurred while processing this directive] [an error occurred while processing this directive] I am an American and I live in Switzerland.  Am I entitled to a credit on my Swiss taxes?   [an error occurred while processing this directive] 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. [an error occurred while processing this directive] The Tax Prophet's section on Foreign Taxpayers [an error occurred while processing this directive][an error occurred while processing this directive][an error occurred while processing this directive] [an error occurred while processing this directive] 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? [an error occurred while processing this directive] 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.  [an error occurred while processing this directive] The Tax Prophet's section on Employee Stock Options [an error occurred while processing this directive] [an error occurred while processing this directive] [an error occurred while processing this directive] [an error occurred while processing this directive]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"? [an error occurred while processing this directive] 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. [an error occurred while processing this directive] The Tax Prophet's section on Tax-Free Exchanges [an error occurred while processing this directive] [an error occurred while processing this directive] [an error occurred while processing this directive] [an error occurred while processing this directive] 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. [an error occurred while processing this directive] 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. [an error occurred while processing this directive] The Tax Prophet's section on Gift Taxes [an error occurred while processing this directive] [an error occurred while processing this directive] [an error occurred while processing this directive] [an error occurred while processing this directive] 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? [an error occurred while processing this directive] 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). [an error occurred while processing this directive] [an error occurred while processing this directive] [an error occurred while processing this directive] How do the rules for a "Temporary assignment in an area other than where you have a residence" apply to US Service members? [an error occurred while processing this directive] 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. [an error occurred while processing this directive] The IRS Publication dealing with the taxation of U.S. Armed Forces Publication 3 [an error occurred while processing this directive] [an error occurred while processing this directive] [an error occurred while processing this directive]