US

U.S. Federal Estate Tax   U.S. Federal estate tax may apply to the decedent’s taxable estate at death and not just on the share received by a particular beneficiary. The taxable estate is the gross estate less allowable deductions.   The gross estate includes the value of all property the decedent owns partially or in full at the time of death (including real property outside the United States). The gross estate also includes the following:   Life insurance proceeds payable to the estate or, if the decedent owned the policy, to his or her heirs. The value of certain annuities payable to the estate or the decedent’s heirs. The value of certain property the decedent transferred within 3 years before death. Certain transfers made during the decedent’s life without an adequate and full consideration in money or money’s worth. Property over which the decedent possessed a general power of appointment. […]

Gift Tax The gift tax applies to lifetime transfers of property from one person (the donor) to another person (the donee). A gift is made if tangible or intangible property (including money), the use of property, or the right to receive income from property is given without expecting to receive something of at least equal value in return. If something is sold for less than its full value or if a loan is made without interest or with reduced (less than market rate) interest, a gift may have been made. The donor is generally responsible for paying the gift tax.   The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. Generally, the following gifts aren’t taxable gifts.   Gifts, excluding gifts of future interests, that aren’t more than the annual exclusion for the calendar year. Tuition or medical expenses paid […]

US Trademark Registration Introduction   A trademark is a word, phrase, or logo that identifies the source of goods or services. United States trademark law is mainly governed by the Lanham Act. Common law trademark rights are acquired automatically when a business uses a name or logo in commerce and are enforceable in state courts. Marks registered with the U.S. Patent and Trademark Office are given a higher degree of protection in federal courts than unregistered marks—both registered and unregistered trademarks are granted some degree of federal protection under the Lanham Act 43(a). Frequently asked questions   Q:          What is “Basis for filing” in the USA? A:          A “filing basis” is the basis upon which you have filed your trademark application with the United States Patent and Trademark Office (USPTO). You must include one or more filing bases in an application. Each “filing basis” has different requirements. There are four […]

U.S. Individual Income Tax— Part2 Whom May I Claim as a Dependent?   Certain tax benefits, such as an advantageous filing status or certain tax credits on your U.S. individual income tax return, require either a qualifying child or qualifying relative. This article will introduce you to dependency definitions and related requirements.   Qualifying Child   Your child must have the required Social Security number that was issued on or before the due date of the tax return (including extensions) and must pass all of the following tests to be your qualifying child:   (1)     Close Relative   Under the close relationship test, to be a qualifying child of a taxpayer, the child must be the taxpayer’s son, daughter, adopted child, stepchild, foster child, brother, sister, step brother, step sister or a descendent of any of them.   (2)     Age Limit   In general, at the end of the filing […]

U.S. Individual Income Tax Part 6 Tax Liability or Refund   After subtracting your adjustments and deductions from your gross income, you have your taxable income. Now you can use the IRS’s tax table to calculate your preliminary tax liability for the year.   The individual income tax rate (2019) structure is a progressive tax rate structure.   2019 Tax Rate Single Head of Household Married Filing Jointly Married Filing Separately 10% $0–$9,700 $0–$13,850 $0–$19,400 $0–$9,700 12% $9,701–$39,475 $13,851–$52,850 $19,401–$78,950 $9,701–$39,475 22% $39,476–$84,200 $52,851–$84,200 $78,951–$168,400 $39,476–$84,200 24% $84,201–$160,725 $84,201–$160,700 $168,401–$321,450 $84,201–$160,725 32% $160,726–$204,100 $160,701–$204,100 $321,451–$408,200 $160,726–$204,100 35% $204,101–$510,300 $204,101–$510,300 $408,201–$612,350 $204,101–$306,175 37% Over $510,300 Over $510,300 Over $612,350 Over $306,175   For example, if: a taxpayer with a single filing status has $92,000 of taxable income. The income tax liability in 2019 is calculated as the below: ($9,700 − $0) × 10% = $970 ($39,475 − $9,700) × 12% = […]

U.S. Individual Income Tax Part 5 Tax Credits   After you figure your tax, you may be eligible for certain credits that lower your tax liability. This article will give you a brief introduction to some basic tax credits.   Child Tax Credit   Beginning with Tax Year 2018, you may be able to claim the Child Tax Credit if you have a qualifying child under the age of 17 and meet other qualifications. The maximum amount per qualifying child is $2,000. Up to $1,400 of the credit can be refundable for each qualifying child as the Additional Child Tax Credit. A refundable tax credit may give you a refund even if you don’t owe any tax.   Your qualifying child must have a Social Security Number issued by the Social Security Administration before the due date of your tax return (including extensions) to be claimed as a qualifying child […]

U.S. Individual Income Tax Part 4 How to Calculate Your Taxable Income?   Some people may be interested in how to calculate own taxable income (line 11b in Form 1040). This article will give you a brief guideline.   Step 1        Total Income   The IRS requires you to report all your income that you have received during the tax year. This includes your wages, taxable interest, ordinary dividends, taxable IRA distribution, taxable pensions and annuities, taxable social security benefits, capital gain (attach Schedule D) and other income (attach Schedule 1). Your total gross income is determined by adding up all types of income.   Step 2        Adjusted Gross Income (AGI)   Your AGI is the next step in figuring out your taxable income. Once you report all of your income on your Form 1040 and Schedule 1, you will then have the chance to adjust your income on Schedule […]

U.S. Taxation of Foreign Investment in Real Estate Related Income Real estate is a tax-driven industry. Foreign investors, nonresident alien, who have purchased real estate property in the U.S. are subject to several tax and filing requirements. You are a nonresident alien, including foreign individuals or foreign business entities, if not meet the resident alien definition.   According to the resident alien definition, you are a resident alien of the United States for tax purposes if you meet either the green card test or the substantial presence test for the calendar year (January 1-December 31). To meet substantial presence test, you must be physically present in the U.S on at least 183 days during the current year, or 183 days during the 3-year period that includes the current year (at least 31 days) and the 2 years immediately before that.   This following content focus on U.S. taxation of real estate held directly by non-resident aliens, especially […]

U.S. Employer Identification Number Guide The Employer Identification Number (EIN), also known as the Federal Employer Identification Number (FEIN) or the Federal Tax Identification Number (FTIN), is a unique nine-digit number (for example, 12-3456789) assigned by the Internal Revenue Service (IRS) to business entities operating in the United States for the purposes of identification. EIN just like a Social Security Number (SSN) for your personal identification number. The EIN number allows you to communicate with the Internal Revenue Service (IRS) in the dealing of all the tax matters of your company. You may also need EIN for bank account opening, business license application or other reasons.   The EIN is issued by the Internal Revenue Service (IRS) upon application. You can apply for EIN via website, fax or mail. Expedited service is not available. To complete the application, you should prepare the Form SS-4 and submit it with your company’s […]