Category Archives: International Tax

Taxation of Foreign Nongrantor Trusts: Throwback Rule

I. Introduction  The throwback rule is intended to prevent a foreign trust from accumulating income, thereby delaying the reporting of that income by U.S. beneficiaries until the time when the income is eventually distributed. The throwback rules defeat this income … Continue reading

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United States International Taxation

The U.S. international income tax rules are among the most complex in the Code. The purpose of this article will be to set forth in a comprehensible manner the essence of those rules. Part I will discuss how a foreign person may become subject to U.S. tax, and the distinction between foreign and domestic “source” income. Part I will also introduce the concept of income “effectively connected” with a “U.S. trade or business.” Part II, appearing in the next issue, will conclude a discussion of the trade or business concept, and will discuss the foreign tax credit, the impact of treaties, and other issues. Continue reading

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