Tax Information

For Your Consideration: Residency Determines Tax Liabilities by Scott Harty; Smith, Gambrell & Russell, LLP
When a foreign person becomes a U.S. resident, the entire U.S. tax code becomes relevant. For foreign business owners, no other portion of the tax code may be more relevant than the provisions governing U.S.-owned foreign corporations (commonly referred to as “Subpart F”). At the risk of extreme oversimplification, Subpart F may require the U.S. owner(s) of foreign corporations to pay tax on phantom income. More specifically, if U.S.- owned foreign corporations earn certain types of income, or make certain types of U.S. investments, the U.S. shareholders may be required to recognize U.S. taxable income even though the foreign corporation makes no actual distribution to the shareholders. (MORE)

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