| Autor: |
Yang, James G. S., Strauss, Ronald, Lohrey, Peter |
| Předmět: |
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| Zdroj: |
Business Journal for Entrepreneurs; 2015, Vol. 2015 Issue 1, p16-33, 18p |
| Abstrakt: |
The Health Care and Education Reconciliation Act of 2010 has created a new tax regime known as net investment income tax - which has its own tax base and tax rate. The tax base consists of interest, dividends, passive income and capital gains from stock. The net investment income tax rate is 3.8% in addition to the regular income tax rate. However, there is a threshold amount. Net investment income is taxable only to the extent of the lesser of the net investment income or the taxpayer's adjusted gross income in excess of a threshold amount of $200,000 for a single payer or a head of household, or $250,000 for a married couple filing a joint return. This article investigates the tax problem created when the net investment income comes from a foreign country. Specifically, we focus on the foreign tax credit aspect. Due to the difference between the net investment income tax rate and the regular income tax rate this article introduces the concept of "rate differential portion" that places the two sources of income on a comparable basis. Because of this new tax regime, there is now a new foreign tax credit in addition to the regular foreign tax credit on dividends and long-term capital gains. This paper presents an example. In addition, we also develop many tax planning strategies for the purposes of maximizing the use of the foreign tax credit. [ABSTRACT FROM AUTHOR] |
| Databáze: |
Supplemental Index |
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