An inheritance tax is imposed on the net properties of a deceased person. A foreign citizen investing in the US must understand the significance of such exposure. Inheritance tax is applicable to any asset in the US, including shares and intangible assets. This means that even investments in the stock market with exposure to the … Read more
Section 1031 of the US tax code allows the deference of capital gains from the re-exchange of similar properties. The IRS had determined strict rules and conditions to prevent the abuse of this section. It is therefore best to use a qualified intermediary whose role is to prevent disruptions to the process. Section 1031 determines … Read more
The Israel-US tax treaty determines the tax fee and the order in which it is performed. Certain income of taxable in the US, and Israel has the right to charge the residual tax (the difference) whereas other income is taxable only in Israel, under certain conditions. Beyond the tax treaty, there are also Israel’s internal … Read more
A partnership is a pass through entity for tax purposes, meaning that profits/losses are channeled directly to the partners and they are the ones to be taxed. Thus partnerships avoid the double taxation (corporate tax + dividend tax) typical of corporations, yet still maintain the limited liability principle typical of corporations. Partnerships do not owe … Read more
Section 871 determines that the default taxation of income from rentals is FDAP and thereby owes fixed taxation at the rate of 30% of income, without the ability to file expanses. Your asset manager is responsible for this, and must deduct and pay the amount to the IRS. In this manner, the investor is not … Read more
In order to understand US tax policy, the Israeli investor must first understand the structure of the US government. The US is a federal presidential republic, a union of states that created a “super entity” to which they relinquished some of their governmental authorities. Each member of the federation has its own government and laws, … Read more
