In this foundational post, I’ll cover the basics—and some not-so-basic subtleties—of the Canadian foreign tax credit (FTC). I’ll focus mainly on its application to individuals (not corporations) with “non-business” income such as from foreign employment, pensions, and investments.
Continue reading Canadian Foreign Tax CreditThey do care!
In my last post on effectively connected 401(k) payments, I complained that there was no clear user-facing documentation from the IRS on the split between contributions (ECI) and plan earnings (non-ECI).
Continue reading They do care!Effectively Complicated Income
I ended my post on 60(j) rollovers with a cliffhanger, by hinting that the rate of US tax on a nonresident alien’s IRA or 401(k) distribution might depend on the extent to which the income is “effectively connected with the conduct of a trade or business within the United States”—a term of art from IRC § 871 that I quoted without the elaboration it deserves.
Continue reading Effectively Complicated IncomeUpdate: IRS doesn’t like lump-sum after all?
In a previous post on the rollover of a US retirement plan to an RRSP, I argued that the IRS viewed “periodic” as non-restrictive in treaty pension provisions.
Continue reading Update: IRS doesn’t like lump-sum after all?The 60(j) rollover: 15% or 40%?
[Edit Jan 2021: This post has a follow-up: Update: IRS doesn’t like lump-sum after all?]
In keeping with stereotypes, Canadian tax law is nice to US retirement plans, but the US does not reciprocate.
Continue reading The 60(j) rollover: 15% or 40%?The advance refund is not an advance refund
Pandemic tax relief encompasses far more than deadline pushes; governments are also writing checks. The US, under the CARES Act[1]Coronavirus Aid, Relief, and Economic Security Act, Pub. L. 116-136, 134 Stat. 281 (2020), is giving many of its citizens and residents a $1200 payment. The IRS calls this an “Economic Impact Payment” (EIP), but the codification in IRC § 6428 calls it an “advance refund amount”[2]IRC § 6428(f).
Continue reading The advance refund is not an advance refundDeadlines, Extensions, and Pandemics
With COVID-19 wreaking havoc on people and business, the due dates for filing and paying personal income tax have been extended in both Canada and the US.
Continue reading Deadlines, Extensions, and PandemicsSource and residence
There are 195 countries[1]www.worldometers.info/geography/how-many-countries-are-there-in-the-world/, and you probably pay most of them no income tax. Why?
Continue reading Source and residenceThe power to tax income in Canada
Canada allowed its legislative body the power of taxation more broadly, and more readily, than its neighbour to the south.
Continue reading The power to tax income in CanadaThe power to tax income in the United States
The right of the U.S. government to levy a federal income tax has been unequivocally assured by the Sixteenth Amendment since its passage in 1913, but was prior to that time a vexing question for the judiciary.
Continue reading The power to tax income in the United States