Sourcing U.S. and Foreign Income: Dividends, Service Income, Property Sales, Rents, and Income Tax Treaties

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A


Conducted on Wednesday, July 8, 2020

Recorded event now available

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Program Materials

This webinar will provide a comprehensive review of how income is sourced to the U.S. and other countries. Our authoritative panel will provide insights to help mitigate multi-country taxation and avoid improper classifications of income. They will explain the benefits available in particular income tax treaties and review the exceptions to the general rules for each class of income.

Description

U.S. citizens, residents, domestic corporations, trusts, and estates are taxed on worldwide income. Foreign tax credits help alleviate the resulting double-taxation of income for U.S. residents but are only available on foreign-sourced income. Foreign persons, on the other hand, are generally subject to U.S. tax only on their income from sources within the U.S. Determining whether income is within the U.S. (U.S.) or without the U.S. (foreign) is critical to accurately assess taxes and credits for taxpayers.

Although logical at first blush, the rules for sourcing income are replete with exceptions. Dividends, for example, are sourced to the place of incorporation or the location of the taxpayer with exceptions. This is true unless it is foreign-sourced dividend income and 25% or more of the corporation's worldwide gross income over a certain testing period is effectively connected income.

Similarly, the source of compensation for labor or personal services is the place of performance of the services. However, there is a de minimis exception to the service income source rule for persons temporarily present in the United States and U.S. tax treaties provide additional exceptions to this rule.

Tax professionals must understand each income type--whether rents, property sales, dividends, or service income--and its sourcing rules and exceptions to mitigate the burden of worldwide taxation on taxpayers.

Listen as our panel of international tax veterans covers the details of appropriately sourcing income, the caveats and exceptions in sourcing this income, and best practices to lessen the taxation of global income paid by taxpayers.

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Outline

  1. Source of income rules: an overview
  2. Dividend income
  3. Service income
  4. Rents and royalties
  5. Sale of real property
  6. Sale of other property
  7. Other income
  8. Treaty exceptions

Benefits

The panel will cover these and other vital issues:

  • What are the exceptions to the general dividend income sourcing rules?
  • How is service income apportioned between the U.S. and other countries
  • What is the temporary presence exception and how is it applied?
  • How is personal property, including trademarks and intangible assets, sourced?

Faculty

Benayoun, Andre
Andre Benayoun, J.D.

Partner - Tax & Business Services
Marcum

Mr. Benayoun is a Partner who specializes in consulting around international taxation for inbound and outbound...  |  Read More

McCormick, Patrick
Patrick J. McCormick, J.D., LL.M.

Partner
Culhane Meadows Haughian & Walsh

Mr. McCormick specializes in the areas of international taxation, tax compliance, and offshore reporting...  |  Read More

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