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  1. Answers
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    2,343

    I don't think I agree with ATE. If it were a...

    I don't think I agree with ATE. If it were a direct reimbursement I might agree. However, there is a charitable contribution deduction allowed for hosting foreign exchange students but it is limited...
  2. Well, Excon is partly right. There will be a...

    Well, Excon is partly right. There will be a currency gain if you bought them for less than the current exchange rate but it will be ordinary income.
  3. I was following on regarding EDO's post. The...

    I was following on regarding EDO's post. The treaty would still be applicable to him/her.
  4. If they are married, they either file Married...

    If they are married, they either file Married Filing a Joint Return or Married Filing Separately.

    Both citizens and residents file a 1040 and report worldwide income.
  5. I disagree. If the person is from China, the...

    I disagree. If the person is from China, the treaty benefit remains available to him/her.
  6. Answers
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    2,117

    If it applies use Form 8833. You will show the...

    If it applies use Form 8833. You will show the income on the 1040 but subtract it back out on other income.
  7. Interest is sourced per the residence of the...

    Interest is sourced per the residence of the debtor. So the interest is US source income but I agree that the treaty would reduce the rate to 0.
  8. Answers
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    687

    If you are employed by the university then there...

    If you are employed by the university then there will be no FICA tax for a student.
  9. Agree with IntlTax. Technically speaking, the...

    Agree with IntlTax.

    Technically speaking, the payment of the tax by the withholding agent may require gross-up (in essence, the payment of the tax constitutes income to the recipient). See...
  10. Answers
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    933

    There's a lot more to this than you think. ...

    There's a lot more to this than you think.

    One issue you need to consider is whether the foreign country in which you are resident will impose tax on the earnings of the account. Although these...
  11. Note that at the moment it is in fact possible to...

    Note that at the moment it is in fact possible to pepare tax returns with no licensing and/or qualifications. However, that is in the process of changing. The IRS is moving steadily toward a model...
  12. I agree with IntlTax. Under US law, the interest...

    I agree with IntlTax. Under US law, the interest is subject to US tax. Treaties may alleviate the burden in part or full.
  13. I disagree with ATE that it depends on your...

    I disagree with ATE that it depends on your passport.

    On the other hand, I don't think using the Austrian treaty is of any benefit to you. It is much less generous than the India-US treaty and...
  14. I'm assuming you are referencing the trainee...

    I'm assuming you are referencing the trainee article. It is one year from the date of your arrival and hence if you qualify you could apply part of it to the 2008 year. However, if your income is...
  15. I disagree. The law defines principal residence...

    I disagree. The law defines principal residence as having the same meaning as under section 121.

    Even if you just look at the instructions for the form, it states clearly that a principal...
  16. I strongly disagree with ATE's suggestion. If she...

    I strongly disagree with ATE's suggestion. If she lived in the house for only a few months in 2007, and you have both lived together in your main home before and since then, then the house that was...
  17. Answers
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    884

    I don't think anyone is questioning the situation...

    I don't think anyone is questioning the situation in the original post. OPT is a student related employment so he appears to qualify under the treaty.

    The issue arose from ATE's claim that the...
  18. I agree that there is no point in filing as joint...

    I agree that there is no point in filing as joint residents for the whole year. As I pointed out, they would need to include their UK income for all of 2008.

    They are not currently dual status --...
  19. Answers
    5
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    1,892

    OK, if you are asking whether you are able to...

    OK, if you are asking whether you are able to keep your employer contributions, that depends on your plan. Your employer can tell you that. You need to ask about the vesting rules.
  20. Answers
    5
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    1,892

    Even if you pay taxes when you leave and withdraw...

    Even if you pay taxes when you leave and withdraw the money, how can this be a bad deal if your employer is matching you dollar for dollar? If you know somewhere else where you can get a 100% return,...
  21. The benefit is that you don't have to include...

    The benefit is that you don't have to include your foreign income for the period during which you did not live in the US.

    If you had a significant amount of foreign income that was not taxed or...
  22. I think there's a bit of confusion here. If...

    I think there's a bit of confusion here.

    If you elect to file a joint return and be treated as residents all of 2008 you must include your UK income on your US return (not just the UK income...
  23. Answers
    13
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    884

    I mostly agree. The point is not the visa status....

    I mostly agree. The point is not the visa status. The point is whether they are a student/trainee. If they qualify as a student/trainee then they will be entitled to the benefit.
  24. Answers
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    884

    ATE - your position is completely incorrect. You...

    ATE - your position is completely incorrect. You may not access article 20 of the treaty unless you are a student, trainee etc. A student who becomes resident under the SPT and yet still qualifies as...
  25. You can't file as a NR and file MFJ. The only...

    You can't file as a NR and file MFJ.

    The only way that you would file MFJ is if you make some additional elections which would necessitate you including income earned in the foreign country (in...
  26. According to the information you've provided, you...

    According to the information you've provided, you are a non-resident for 2008.

    If you become a resident in 2009, there are some elections open to you in terms of being resident for all or part of...
  27. If you were on a J1 and 2007 was your first year...

    If you were on a J1 and 2007 was your first year in the US, then you are correct, you should have filed non-resident for the 2008 year. You should file an amended return.

    Go back to the preparer...
  28. In this case, it is not a requirement that the...

    In this case, it is not a requirement that the parent has to provide more than half her support, it is that she must not provide more than half of her own support. I'm assuming that she is a student....
  29. Actually if you stayed for "most" of 2008, you...

    Actually if you stayed for "most" of 2008, you might actually be a dual status alien. We can't ascertain that without more information.
  30. Answers
    2
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    314

    You are confused about what it means to be...

    You are confused about what it means to be non-resident. If you meet the SPT in 2008 which definintely appears to be the case, then you are a resident alien for 2008.

    If you want to file a joint...
  31. Intl Tax, I think the problem is that the OP...

    Intl Tax,

    I think the problem is that the OP won't have sufficient days to pass the SPT in 2009.
  32. The portion of letter quoted in no way implies...

    The portion of letter quoted in no way implies that you will be repaying the 'loan' and in fact it states that the company will pay the taxes and you will be considered as having additional income....
  33. Answers
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    ATE - what I am telling you is that the phrase...

    ATE - what I am telling you is that the phrase "non-resident for even one day" is a meaningless phrase. By definition you cannot be NON-resident in the middle of two residency periods even if you are...
  34. You need to handle this really carefully. You...

    You need to handle this really carefully. You could run into a PFIC situation very easily if you are contributing to a foreign IRA type plan.

    If it is strictly a pension plan then I think you...
  35. IntlTax, I don't believe that the...

    IntlTax,

    I don't believe that the non-discrimination article would apply here. In the ruling, the problem was that a US citizen would have access to 2 paths to the exclusion but a resident only...
  36. Answers
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    725

    Hold on a second, I fear I am being misquoted...

    Hold on a second, I fear I am being misquoted here :) ATE, you continually use the 'non-resident for even one day' phrase but the phrase is mis-used.

    Let me clarify -- if a person becomes...
  37. Answers
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    609

    I disagree with the point about claiming the...

    I disagree with the point about claiming the foreign tax credit on the US return. The income is US source income and the treaty gives the US the right to tax it. Relief from double tax would need to...
  38. Answers
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    1,498

    I don't have a problem with you pointing out that...

    I don't have a problem with you pointing out that the risk of the IRS taking issue with an individual who exceeds the 2 year period by several days/weeks might be quite low.

    However, I think it...
  39. Answers
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    1,498

    ATE, how can a tax letter possibly be required?...

    ATE, how can a tax letter possibly be required? What more proof do you need?

    In essence, you are asking for IRS grace. The taxpayer is over by a few days so you want them to simply not enforce the...
  40. As I noted in my earlier post, the law requires...

    As I noted in my earlier post, the law requires that a person be a resident (or citizen) to claim the foreign earned income exclusion. Although the regulations permit an individual who makes the...
  41. Answers
    26
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    1,498

    ATE, I don't believe this changes anything at...

    ATE,

    I don't believe this changes anything at all in the prior discussion. The US- India treaty technical explanation gives the US the right to tax the income retroactively if the person exceeds...
  42. She cannot exclude the income under the foreign...

    She cannot exclude the income under the foreign earned income exclusion as that would require her to have been a resident during the full 330 days. If she does not meet that test, then she is not...
  43. Answers
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    5,059

    If you are not renting it for profit, you can...

    If you are not renting it for profit, you can only take deductions up to the amount of the income. You can't make a loss.
  44. ATE, You have missed the point of the example...

    ATE,

    You have missed the point of the example above. The taxpayer becomes a resident under the SPT (presumably they were here on a visa). The taxpayer leaves the US for several months and then...
  45. ATE, 301.7701(b)-4(c)(2) disproves your...

    ATE,

    301.7701(b)-4(c)(2) disproves your point. It states very clearly that proration only occurs if your start date or termination date don't fall at the start/end of year.

    IntlTax's post...
  46. The change in visa status will not impact your...

    The change in visa status will not impact your ability to claim the treaty exemption for the two year period.
  47. No. The expiry of the L1 visa is totally...

    No. The expiry of the L1 visa is totally irrelevant. Unless you are relying on the treaty, the OP meets the SPT and is a resident for the full year.
  48. No, ATE, you are misunderstanding the meaning of...

    No, ATE, you are misunderstanding the meaning of non-resident.

    If Mr OP arrived on March 1 2008 and remained in the US for the remainder of the year, he would have become a resident but his...
  49. Answers
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    1,498

    I will look forward to hearing the result. I...

    I will look forward to hearing the result. I seriously doubt the IRS is going to give you anything in writing. The law is clear - whether they enforce it or not is a matter of grace and I doubt they...
  50. ATE, What you are saying is incorrect. If he...

    ATE,

    What you are saying is incorrect. If he meets the SPT in 2008 (we all seem to agree that he does), he is a resident. The question becomes: when does his residency begin? According to section...
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