Featured Tax Videos by Richard Lehman

Featured Videos of Richard Sam Lehman, Boca Raton, Florida.

Pre-Immigration Income Tax Planning

This video is specifically for those planning to immigrate to the U.S., to optimize their U.S. taxation. Please make sure that you also review the short article that Mr. Lehman wrote for this video. These videos are a short-cut to understanding the most important tax law changes resulting from the Trump legislation, but a more thorough review may be required to fully understand the content. WATCH THE VIDEO NOW.  REVIEW THE TABLE OF CONTENTS/OUTLINE. READ THE ARTICLE.

The Ponzi Clawback

Please make sure that you also review the short article that Mr. Lehman wrote for this video. These videos are a short-cut to understanding the most important tax law changes resulting from the Trump legislation, but a more thorough review may be required to fully understand the content. WATCH THE VIDEO NOW.  REVIEW THE TABLE OF CONTENTS/OUTLINE. READ THE ARTICLE.

Ponzi Scheme Losses

Please make sure that you also review the short article that Mr. Lehman wrote for this video. These videos are a short-cut to understanding the most important tax law changes resulting from the Trump legislation, but a more thorough review may be required to fully understand the content. WATCH THE VIDEO NOW.  REVIEW THE TABLE OF CONTENTS/OUTLINE. READ THE ARTICLE.

Foreign Investor Taxation & Real Estate Investor Taxation

This Library contains contains 2 videos relevant to Foreign Investors:


(1) U.S. Taxation of Foreign Investors. WATCH THE VIDEO NOW.  REVIEW THE TABLE OF CONTENTS/OUTLINE. READ THE ARTICLE


(2) Foreign Real Estate Investor Tax Planning Techniques (U.S. Taxation of Foreign Real Estate Investors). WATCH THE VIDEO NOW.  REVIEW THE TABLE OF CONTENTS/OUTLINE. READ THE ARTICLE


Please make sure that you also review the short article that Mr. Lehman wrote for this video. These videos are a short-cut to understanding the most important tax law changes resulting from the Trump legislation, but a more thorough review may be required to fully understand the content.  

The Streamline Procedure

Please make sure that you also review the short article that Mr. Lehman wrote for this video. These videos are a short-cut to understanding the most important tax law changes resulting from the Trump legislation, but a more thorough review may be required to fully understand the content. WATCH THE VIDEO NOW.  REVIEW THE TABLE OF CONTENTS/OUTLINE. READ THE ARTICLE. The video also addresses the now-expired Overseas Voluntary Disclosure Program (OVDP) which ended on September 28, 2018. READ THE ARTICLE ON THE OVDP NOW.

Video: Introductory Video by Richard S. Lehman

To better understand the videos offered on this page, please first watch the introductory video by Tax Lawyer Richard Sam Lehman.  Also, please refer to the articles (see the Tax Articles Section of the Library). You should review the short article that Mr. Lehman wrote for each video. These videos are a short-cut to understanding the most important tax law changes resulting from the Trump legislation, but a more thorough review may be required to fully understand the content. READ THE ARTICLES.

Video: Pre-Immigration Income & Estate Tax Planning

This video is for those planning to immigrate to the U.S., to optimize their U.S. taxation. Please make sure that you also review the short article that tax attorney Richard Lehman wrote for this video. These videos are a short-cut to understanding the most important tax law changes resulting from the Trump legislation, but a more thorough review may be required. READ THE RELATED ARTICLE. REVIEW THE TABLE OF CONTENTS/OUTLINE (below the Video). REVIEW THE QUALIFICATIONS OF RICHARD SAM LEHMAN.


Table of Contents/Outline: Pre-Immigration Tax Planning

What is Pre-Immigration Income & Estate Tax Planning?

We are talking about an individual who is presently an alien individual who is going to become a U.S. tax resident for federal income tax purposes.


Once that happens, they are subject to tax on their worldwide income. They may also become U.S. residents for estate tax purposes. This means if they were to die in the U.S., they will be taxed on their wealth, like all Americans. If they become U.S. residents for estate tax purposes, they transfer their wealth at death to beneficiaries.


The earnings that they have made outside the United States before they became U.S. citizens may be accrued earnings. They may have gains from the assets they or income they will not collect that is not going to show up until after these people move to the United States.


· This is gains and wealth that has accrued before they come to the U.S. but they have not “realized and recognized” (a tax term) their gain.


This seminar will discuss the tax planning techniques to preserve such wealth, earning and fortunes, that the U.S. taxpayer who is immigrating to the U.S. has earned prior to their “tax residency.”


We will examine who to avoid these traps.


Taxation Pattern


U.S. Resident Alien (“Tax Resident”) – Subject to Taxation

1. Income Taxation – Worldwide Income

2. Estate Taxation – Worldwide Assets

3. Gift Taxation – Worldwide Assets


U.S. Tax Residents


First, I will list the ways one becomes a 

U.S. taxpayer and then we will discuss them in detail.


1. Marriage.

One can become a tax resident by becoming a U.S. citizen by way of marriage or naturalization.

2. Election.

An immigrant may elect to be taxed as a U.S. resident by electing such status on their U.S. tax return.

3. Permanent Residency.

The U.S. may grant the right to permanent residency. This is the issuance of a Green Card in the United States. The green card holder will be a U.S. taxpayer.

4. U.S. Tax Residency:

Time of Physical Presence in the United States.

· Individuals who physically send a certain amount of time in the U.S. can be subject to U.S. income tax as tax residents who are taxable on their worldwide income.

· This can occur if one physically spends too much time in the U.S. This is known as the “Substantial Presence Test.”


However, this Substantial Presence Test does not apply to certain individuals that will fit into two exceptions. These exceptions will permit an alien individual to stay in the U.S. for a longer period of time than the time required by the “Substantial Presence.” We will review these exceptions.


5. The Closer Connection Exception.

The first exception is the Closer Connection Exception. An alien who has a “closer connection” to a foreign country may stay for a longer period of time in the U.S. without becoming a U.S. taxpayer.

6. Tax Treaties.

Individuals who are governed by a tax treaty between their home country and the United States may stay in the U.S. even longer during the calendar year without becoming U.S. tax residents. This will be explained later.


Status for Tax Purposes


Non-Resident Alien = NOT a “Resident Alien” 


Resident for Income Tax Purposes


1. Green Card

2. Substantial Presence Test

3. Voluntary Election

Exceptions:

4. The Closer Connection

5. Treaties: Tie Breaker


Income Tax Residents

We’re going to look first just at the income tax situation. I will repeat what I said about U.S. tax rates.

· Once you become a U.S. tax resident, you are subject to income tax on your worldwide income like every other American.

· You are subject to tax at the graduated rates.

· The rates start at 10% on the first $36,000 and go as high as 37% for income over $250,000 (single), $500,000 (married). There is an additional tax on investment income of 3.8% or more than $200,000.

· This is the U.S. tax only and does not consider state and city income taxes. Florida has no personal income tax.

· A resident of New York might have additional city income taxes and New York State income taxes that total more than 10% in additional tax.


Tax Treaty – Tie Breaker Rules


Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows:

(a) He shall be deemed to be a resident of the State in which he has a permanent home available to him; if he has a permanent home available in both States, he shall be deemed to be resident of the State with which his personal and economic relations are closer (center of vital interests);

(b) If the State in which he has his center of vital interests cannot be determined, of if he does not have a permanent home available to him in either State, he shall be deemed to be a resident of the State in which he has a habitual abode;

(c) If he has a habitual abode in both States or in neither, he shall be deemed to be a resident of the State of which he is a citizen;

(d) If each State considers him as its citizen or if he is citizen of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.


Citizenship – The Ultimate Tie Breaker


An individual who has a habitual abode in both countries (or neither) is treated as a resident only of the country of his nationality. If all of the other tiebreaker rules are event, the final determination of tax residency will depend on the citizenship.


“He shall be deemed to be a resident of the Contracting State of which he is a citizen.”


Finally, if the taxpayer is a citizen of both countries, then it is left to the tax authorities in both countries as to which country can claim the taxpayer as the resident for tax purposes.


Residency Starting Date


Substantial Presence Test

Residency starting date for individuals meeting substantial presence test. In the case of an individual who meets the substantial presence test with respect to any calendar year, the residency start date shall be the first day during such calendar year on which the individual is present in the United States.


CHART 1: Substantial Presence Test (Note: We are testing the year 2017)

  

FORMULA:

2017 – 100%

2016 – 33.33%

2015 – 16.67%

NON RESIDENT ALIEN

Residency “Days”

120 – 2017

40 – 2016

20 – 2015

TOTAL: 180

RESIDENT ALIEN

Residency “Days”

120 – 2017

50 – 2016

20 - 2015

TOTAL: 190


EXAMPLE 1: Residency Starting Date

Green Card

Residency starting date for individuals lawfully admitted for permanent residence. In the case of an individual who is a Lawful Permanent Resident of the United States at any time during the calendar year, but does not meet the substantial presence test, the residency starting date shall be the first day in such calendar year on which he or she was present in the United States while lawful permanent resident of the United States.

Assumption No. 1:

The alien individual (Non Resident Alien) has no physical presence in the U.S. for the years 2015 and 2016

ALTERNATIVE Assumption No. 2:

The Non Resident Alien had the following U.S. physical presence in the year 2017.

· January 1, 2017 – February 15, 2017 = 46 days

· August 31, 2017 – December 31, 2017 = 123 days

___________________________

Total Days in the U.S. = 169 days

· Green Card issued: August 31, 2017

· With Presence in U.S. August 31, 2017

· Tax Status: U.S. Tax Resident starting August 31, 2017


EXAMPLE 2: Residency Starting Date

Assumption No. 1:

The alien individual (Non Resident Alien) has no physical presence in the U.S. for the years 2015 and 2016

ALTERNATIVE Assumption No. 2:

The Non Resident Alien had the following U.S. physical presence in the year 2017.

· January 1, 2017 – February 15, 2017 = 46 days

· August 1, 2017 – December 31, 2017 = 153 days

___________________________

Total Days in the U.S. = 199 days

· Green Card issued: August 1, 2017

· With Presence in U.S. August 1, 2017

· Tax Status: U.S. Tax Resident starting January 1, 2017


The Closer Connection Exception


Exception: Where individual is present in the United States during less than one-half of current year and closer connection to foreign country is established.


Exceptional Circumstances and Special Benefits


Students

A foreign student who has obtained the proper immigration status will be exempt from being treated as a U.S. resident for U.S. tax purposes even if he or she is here for a substantial time period that would originally result in the student being taxed as a U.S. resident.


The student visa not only permits the student to study in the United States, but to pay taxes only on income from U.S. sources, not worldwide income.

The visa also permits the student’s direct relatives to accompany the student to the United States and receive the same tax benefits.


Four Tax Planning Principles


The Income Tax Objectives

A. Acceleration of Gains – Non U.S. Property

B. Acceleration of Income from Foreign Sources

C. Deferral of Loss Recognition

D. Deferral of Payment of Deductible Expenses


Accelerate Gains Prior to Residency Starting Date

1. A Non-Resident Alien, prior to becoming a U.S. tax resident, will want to make sure that he or she does not have to pay a U.S. tax on gains that have accrued as a practical matter before their residency period. The first strategy is to accelerate (realize and recognize) any and all gains earned by the Taxpayer prior to becoming a Resident Alien.

2. The second key strategy is to accelerate income that is expected to be paid after residency. Income payments should be collected prior to residency to avoid being taxed by the U.S.

3. The third strategy is to defer recognizing a loss until after obtaining tax residency as a Resident Alien so that the loss can be used against post-residency gains. Assets with a fair market value below cost can be sold after residency. Those losses may be taken against gains in assets earned after U.S. residency. These losses can reduce or wipe out gains from the sale of assets that accrue after U.S. residency.

4. The fourth strategy is to defer paying deductible expenses until after the Residency Starting date. Several types of payments (both business and personal) in the U.S. are deductible from a U.S. Taxpayer’s income to determine the actual taxable amount of income.


EXAMPLE 3: 

Assume a non-resident alien owned $1.0 Million Dollars worth of shares of General Motors that was purchased for $50,000. If the shares are sold after U.S. tax residency when the immigrant is a Resident Alien, there will be a tax on $950,000 in gains. A sale of these same shares by a Nonresident Alien before becoming a Resident Alien would result in no taxable gain.


EXAMPLE 4:

PHASE I: Spanish Business Person – Spanish Corporation – Share Value $500,000 – Original Capital $500,000.

PHASE II: Spanish Business Person – Corporate Liquidation – Share Cost $500,000. Share Value $500,000. Asset Value $5,000,000.

PHASE III: Spanish Business Person – Asset Basis $5,000,000 – Asset Value $5,000,000.


EXAMPLE 5: Accelerate Income Prior to Residency Starting Date

For example, assume a non resident alien owns a foreign corporation that conducted business in his home country that now has $2 Million in receivables that will not be collected until after the owner has become a Resident Alien for U.S. tax purposes.


These receivables might be accelerated, for example, by the liquidation of the taxpayer’s company and the transfer of the receivables to the taxpayer at their present fair market value, prior to the Residency Starting Date.


The taxpayer may also sell his interest in the company, or to the company for a Promissory Note. The ongoing foreign company may collect the receivables which are then paid to the seller and Non Resident Alien, in payment of the Promissory Note he received to sell his shares to the company.


Income Assets to Accelerate

· Pension Plans

· Stock Options

· Prepaid Rent

· Prepaid Royalties

· Prepaid Dividends

· Prepaid Interest

· Annuity Products


Defer Recognizing Loss

In today’s times, there may be wealthy immigrants coming to the U.S. who have significant losses in their investment portfolios. If it is economic, these portfolios should not be liquidated and losses should not be realized and recognized prior to immigration to the U.S.; as they can be extremely valuable to use against capital gains in the U.S.; and even against ordinary income in the U.S. under certain circumstances.

- Assume the taxpayer bought General Motors stock and purchased the stock at $1,000 and now it is worth only $500.

- In the event the investor were to sell his stock at a loss prior to becoming a Resident Alien, the loss is useless against other income. Had the General Motors stock been sold in the year of Residency, there would be a tax loss since as a Resident Alien, the taxpayer would pay tax on all of his worldwide net losses and gains.


EXAMPLE 6: Example of Sale at Loss

· Assume a non resident alien taxpayer from Panama has purchased a Panama apartment at the high end of the market for $4.0 Million, and it is worth $3.0 Million before he immigrates to the United States.

· Assume the Panamanian taxpayer will be immigrating to the United States effective January 1, 2019.

· Assume the same taxpayer invests $100,000 in a U.S. corporation after obtaining tax residency and sells the U.S. corporation after obtaining Resident Alien status for $1 Million in excess of its cost by the Panamanian Investor.

· In the event the investor were to sell his Panama apartment at a loss prior to becoming a Resident Alien and then sell his profitable corporation at a again in the following year when he is a Resident Alien, there will be a capital gains tax on the $1.0 Million gain at a cost of $150,000-$200,000.


Had the Panama apartment been sold in the year of Residency, there would be no tax cost at all since as a Resident Alien, the taxpayer would pay a tax on all of his worldwide net losses and gains, thereby reducing his U.S. gains by his Panama losses.


The Estate and Gift Tax


Not only does the United States charge an income tax on income earned in the United States, it also charges on “Estate and Gift Tax” on people who become U.S. tax residents and also on nonresident aliens, but only on a few limited types of assets.


The U.S. estate and gift tax is a tax on the “transfer of wealth.” As we will discuss, U.S. tax residents who transfer wealth are subject to one standard that is applied to their total wealth transferred if they die owning significant assets or they transfer significant assets during life.


We will see that there is a different standard applied in determining whether a non U.S. citizen is subject to the estate and gift tax than the standard that applies for determining the amount of an immigrant’s income or capital gains tax.


The U.S. applies a transfer tax on the transfer of one’s wealth by virtue or death or lifetime gift. It is similar to an inheritance tax that many countries charge, however, it is a tax on the transferor and not the beneficiary.


Estate Tax


Definition of Residency: A “resident” decedent is a decedent who, at the time of his death, had his domicile in the United States. The term “United States,” as used in the estate tax regulations, includes only the States and the District of Columbia. The term also includes the Territories of Alaska and Hawaii prior to their admission as States. See Section 7701(a)(9). A person acquires a domicile in a place by living there, for even a brief period of time, with no definite present intention of later removing. Therefore, Residence without the requisite intention to remain indefinitely will not suffice to constitute domicile, nor will intention to change domicile effect such a change unless accompanied by actual removal.

Richard Lehman: Pre-Immigration Income Tax Planning

Richard Lehman: Pre-Immigration Income Tax Planning

Video: The Ponzi Clawback

Please make sure that you also review the short article that Mr. Lehman wrote for this video. These videos are a short-cut to understanding the most important tax law changes resulting from the Trump legislation, but a more thorough review may be required to fully understand the content.  READ THE RELATED ARTICLE. REVIEW THE TABLE OF CONTENTS/OUTLINE (below the Video). REVIEW THE QUALIFICATIONS OF RICHARD SAM LEHMAN

Table of Contents/Outline: The Ponzi Clawback

By Richard Sam Lehman, Tax Lawyer

The Ponzi Clawback – The Taxation of the Clawback


Deduction of Clawback & Exclusion of Clawback


See Publication of Government Accountability Office (GAO), Report to Congressional Requesters, SECURITIES INVESTOR PROTECTION CORPORATION, Customer Outcomes in the Madoff Liquidation Proceeding.


A Clawback is when a Trustee recovers money from an Investor who profited from the Ponzi Scheme.


A clawback can come many years after, and what will typically happen in a clawback is, after a taxpayer has paid the clawback, there is a deduction for the money paid to make the clawback payment in the year of the payment.


That deduction can reduce the taxes in the year of the deduction and excess losses can be carried forward to be sued against future income for an unlimited period of time.


As a result of the new Trump 2017 Tax Cut and Jobs Act, these losses cannot be carried back.


Clawback Settlement


A clawback of profits earned from the Ponzi scheme or a clawback of invested principal.


The Valuable Tax Refunds From “Clawback” Repayments


I. Clawbacks

II. Mitigation

III. Ponzi Loss – Summarize

IV. Clawback – Tax Profits

V. Clawback – Principal

VI. Summary

VII. Net Operating Loss


Mitigation Section, Internal Revenue Code Section 1341 … permits one type of the clawback payment to be taken as an ordinary income deduction in the year in which the clawback income was originally taxed …


Important: IRS Code Section 165(c)(2): There shall be allowed as a deduction any loss sustained during the taxable year and not compensated for by insurance or otherwise ….


Theft Loss


“For federal income tax purposes, theft is a word of general and broad connotation covering any criminal appropriation of another’s property ….”


A Unique IRS Code Section


Since the “mitigation section” is complicated, we are going to look at each of the elements that must be met.

One has to understand this code section to appreciate how valuable it is.


Internal Revenue Code Section 1341

Designed to allow someone who pays funds back in a clawback to be able to go back to the year that the clawback income was earned for tax purposes.


Claim of Right Doctrine


The study of the mitigation section starts with the “claim of right doctrine.”


Mitigation Section


The mitigation section has four important requirements and one requirement that is outdated by now. 


They are:

(1) An item of income.

The word “item is defined in the law. The Code 61 Section defines income as including Compensation for services, gross income derived from business, interest, royalties, etc.

Inventory: It is very important to keep in mind that the inventory of a taxpayer’s business is accounted for under its own unique set of tax principles.

(2) Because it appeared that the taxpayer had unrestricted right to that item of income.


Apparent right to the income.


The claim of wrong exception to the claim of right principle. The claim of wrong exception could not apply to the typical Ponzi Scheme victim.


(3) The taxpayer must be able to claim that in the year that the clawback was made, a deduction would be allowed for the payment.


Entitlement to deduction in year of payment.


The mitigation section is a relief provision. It is not a tax deduction provision.


Clawback losses are not lost directly in the Ponzi scheme.


Using Mitigation Section. 


The Ponzi Scheme Clawback & “Same Circumstances”


(4) The fourth important requirement is that is must be established after the close of the taxable year.


Repayment because lack of unrestricted right established.


One case states that the “established” requirement is met under the following circumstances – good faith, non-collusive settlement agreement.

Barrett Case.

Pike Case.


(5) The fifth requirement is that the amount of the deduction must exceed $3,000.


Summary - The Clawback of Profits


The Ponzi Scheme Clawback of profits passes all of the tests of the Mitigation Section.


See the IRS FAQ. The profits returned in a clawback are deductible as ordinary losses, not as theft losses.


The Treatment of Clawback of invested capital (principal) withdrawn from a Ponzi Scheme


The IRS FAQ directly relates only to the Clawback of Ponzi Scheme income. The FAQ did not publish any materials on the tax treatment of the Clawback of principal.


Settlement Agreement should include (1) language to clarify the item being clawed back, and (2)  tax counsel should review settlement agreements involving a Clawback.


Loss Carry Overs & Carry Backs


There is no Loss Carryback of deductions from Ponzi Schemes or a deduction from a Clawback under the new 2017 Trump Tax Cut & Jobs Act.


The IRS FAQ ruled that the Clawback of income was entitled to be treated as a loss resulting from the transaction.


Ponzi losses of principal and profits are both treated as ordinary losses.


Review of the Mitigation Section


A section of the Internal Revenue Code that corrects an injustice in the tax law.


Profits


The Clawback of profits is not a theft loss.


Principal


The Clawback of principal is deductible similar to a theft loss.


Adjustments to a liability of previous year


The IRS Distinction


It is important to note that the IRS has made a distinction between ….


(a) Losses of a clawback that is considered to be a “repayment” of profits earned in a Ponzi Scheme; and

(b) Losses that result from invested principal that is lost as a result of a Ponzi Scheme clawback.

Richard Sam Lehman, Tax Lawyer, Video: The Ponzi Clawback – The Taxation of the Clawback

Richard Sam Lehman, Tax Lawyer, Video: The Ponzi Clawback – The Taxation of the Clawback

Video: Ponzi Scheme Losses

Please make sure that you also review the short article that Mr. Lehman wrote for this video. These videos are a short-cut to understanding the most important tax law changes resulting from the Trump legislation, but a more thorough review may be required to fully understand the content. READ THE RELATED ARTICLE.  REVIEW THE TABLE OF CONTENTS/OUTLINE (below the Video).

Table of Contents/Outline: The Ponzi Scheme & Tax Loss

By Richard S. Lehman, Esq.

- “Theft” is a word of general and broad connotation, covering any criminal appropriation of another’s property.

The Ponzi Scheme: 

An Investment Scheme 

You were promised large profits

Received Theft Loss

The Law on Direct Ponzi Loss

Ordinary Loss

The revenue ruling clarified the benefits of a business-oriented theft loss. The Ponzi Scheme Loss is an ordinary deduction for losses incurred in a transaction entered into for profits.

The Amount of the Loss (Basis) & Phantom Income

Definition of Phantom Income: Theft Loss resulting from a Ponzi scheme is generally ….

1. The initial amount invested in the arrangement

PLUS

2. Any additional investments upon which taxes have been paid, less amounts withdrawn for the taxpayer’s benefit.

Year of Discovery

The Amount & Timing of the Theft Loss

Reasonable Prospect of Recovery

- The taxpayer’s legal rights as of the end of the year of discovery are all important and need to be studied to make a proper decision.

Helpful Documents

Revenue Ruling 2009-9

Revenue Procedure 2009-20

The Safe Harbor (revenue procedure)

Related to the Ponzi Scheme Loss:

- The Law & The Internal Revenue Ruling

- The Safe Harbor & The Internal Revenue Procedure

- Tax Planning

Ponzi Schemes & Theft Loss

- Amount of the Theft Loss

- Year of Theft Loss Deduction

- Amount of Theft Loss Deduction in Year of Discovery

- Amount of Theft Loss Deduction in Later Years

Theft Loss vs. Amended Returns

The 2017 Tax Cut & Jobs Act (Trump Tax Bill) - now unlimited Carry Forward as opposed to prior rules with a 20-year limitation.

Amended Returns – No litigation Costs or Delays

Summary

1. A financial theft occurs

2. In the year the loss is discovered a business deduction can be claimed

3. The amount that can be claimed in the year of discovery may be limited if there is a reasonable prospect of discovery

4. Those deductions that could not be taken because there was a “reasonable prospect of recovery” can be taken when it is “ascertained with a reasonable certainty” that they no longer can be recovered.

Refunds can be as high as 37% for each Dollar of Loss

As high as 37% and 39.6% for Losses discovered prior to 2018

Non-Business

Non-business theft losses are no longer deductible

Ascertainable Standard – How much might still be recovered?

Other Reductions to Qualified Investment Loss

Quantifying the Amount of Theft Loss Deduction in Year of Discovery

The Elimination of Non-business

The new Trump Tax law will no longer allow a theft loss deduction for non income producing endeavors.

Professional Tax Planning

The Safe Harbor – The IRS Revenue Procedure

The Safe Harbor requires that the Ponzi Scheme victims forego the opportunity to file amended returns for those years that are still open by the statute of limitations.

Qualified Loss

Quantifying the Amount of Theft Loss Deduction in Year of Discovery

Qualifying for Safe Harbor

Estates & Trusts – Deductions Available

Richard S. Lehman has established a sophisticated private practice focusing on tax law.

Richard S. Lehman has established a sophisticated private practice focusing on tax law.

Video: U.S. Taxation of Foreign Investors

Please make sure that you also review the short article that Mr. Lehman wrote for this video. These videos are a short-cut to understanding the most important tax law changes resulting from the Trump legislation, but a more thorough review may be required to fully understand the content. READ THE RELATED ARTICLE. REVIEW THE TABLE OF CONTENTS/OUTLINE (below the Video).

Table of Contents/Outline: Taxation of Foreign Investors

By Richard S. Lehman, Esq.

Define the Foreign Investor

Taxation Pattern

Non Resident Alien – Individual Investor – Subject to Taxation

Status for Tax Purposes

Substantial Presence Test

Exceptional Circumstances and Special Benefits

The Closer Connection Exception

Tax Treaties – Tie Breaker Rules

Citizenship – The Ultimate Tie Breaker

Two Types of Federal Income Taxation Patterns

Several Important Exceptions

Summary

Source of Income Rules

Source of Income

Source of Deductions

Available Entities 

- Individual Ownership

- Limited Liability Company

- Partnership

- U.S. Corporation

- Foreign Corporation

- Tiered Corporate

The Individual Foreign Investor

- The Problem of the Estate Tax

Tax Planning Opportunities

Portfolio Loans

Like Kind Exchange – Real Estate Only

Richard S. Lehman has established a sophisticated private practice focusing on tax law

Richard S. Lehman has established a sophisticated private practice focusing on tax law

Video: Foreign Real Estate Investors

Please make sure that you also review the short article that Mr. Lehman wrote for this video. These videos are a short-cut to understanding the most important tax law changes resulting from the Trump legislation, but a more thorough review may be required to fully understand the content. READ THE RELATED ARTICLE. REVIEW THE TABLE OF CONTENTS/OUTLINE (below the Video).

Table of Contents/Outline: Foreign Real Estate Investors

By Richard Lehman, Esq.

I. Principal Objectives

Limited Personal and Asset Liability

Single U.S. Tax

Avoid Double Taxation – U.S. and Country of Investor

Confidentiality

Tax Planning:

- Eliminate U.S. Taxation and Real Estate Income and Gains

- Eliminate U.S. Estate and Gift Tax

- Eliminate U.S. Branch Tax on Foreign Corporations

- Single Tax

- Deferral of Payment of Tax

- Reduce Tax Rates

II. Basics

- Tax Rates

- Taxable Persons and Entities:

- Foreign Individual Investors

- Limited Liability Company/Partnership

- The U.S. Corporation

- Foreign Corporation

- Foreign Trusts

III. Planning Techniques

Avoidance of the Double Tax – Gains

Elimination of the U.S. Estate and Gift Tax and the Branch Tax

The Foreign Trust – U.S. Estate Tax Avoidance and Income Tax Benefits

Tax Bracket Advantages and Individual Planning

Avoidance of the Double Tax

Tax Free Income

Partially Tax Free Income

Tax Treaties

Richard S. Lehman has established a sophisticated private practice focusing on tax law.

Richard S. Lehman has established a sophisticated private practice focusing on tax law.

Video: The Streamline Procedure

Note that the Offshore Voluntary Disclosure Program (OVDP), which is referred to in this video, ended on September 28, 2018. Please make sure that you also review the short article that Mr. Lehman wrote for this video. These videos are a short-cut to understanding the most important tax law changes resulting from the Trump legislation, but a more thorough review may be required to fully understand the content. READ THE RELATED ARTICLE. Information on the expired OVDP is here. TABLE OF CONTENTS.

Table of Contents/Outline: The Streamlined Filing Procedure

By Richard S. Lehman, Esq.

The IRS Amnesty Program & The New Streamlined Filing Compliance Procedure


I. Introduction to Offshore Voluntary Compliance Program and the Streamlined Compliance Program

A) Two Separate Programs

i. Offshore Voluntary Compliance – Expensive and Guaranteed closure on all other penalties

ii. Streamlined Program – Relatively inexpensive

B) History

i. United Bank of Switzerland

ii. America wakes up

iii. Offshore Voluntary Compliance Program 2009-2014

iv. 2014 Streamline Program

II. Offshore Voluntary Compliance Program

A) 8 Years Amended Returns

B) Taxes Paid on all omitted income

C) 20% Accuracy Penalty on Taxes due

D) Interest on Taxes

III. The FBAR Penalty – The IRS “club” 27.5% Payment on highest omitted bank account value and other assets that produced income

A) Penalties Avoided

B) Ineligible Parties – Bank Reported Account- Examination in Progress

IV. Reduced Penalties and Opt Out

V. Frequently Asked Questions

VI. The Streamlined Program

A) U.S. Residents

i. 3 Years Prior Taxes

ii. Interest on Taxes

iii. 5% Bank Deposit and Foreign Asset Penalties

B) Nonresident of the U.S.

i. 3 Years Prior Taxes

ii. No Bank Deposit Penalty

VII. The Concept of Willfulness

VIII. Special Exceptions

A) Holocaust Victims

B) No taxes owed


Value can be lost without good professional advice

Richard S. Lehman has established a sophisticated private practice focusing on tax law.

Richard S. Lehman has established a sophisticated private practice focusing on tax law.