User talk:Smktax

From TaxAlmanac

I note you very informative answers.Would appreciate with some leads on the following case :

Facts: 1)H, is a NRA, married to W, also an NRA .(Non-Treaty domiciled in community) 2)H and W own a joint bank account in the State of NYK with Rights of Survival. 3)H and W own a joint broker account in the State of NYK with right of survival 4)H is the sole contributor to the NYK bank account by way of his employer directly transfering the funds to the Joint account (employment not connected with a trade/business in the US). 5)H is the sole contributor to the NYK broker account by way of receiving US shares from his employer(employment not connected with a trade/business in the US)

Questions : 1.Would H’s contribution to the joint bank account be defined as "intangible assets" ? 2 Would H’s contribution to the joint broker account be defined as intangible asset ? 3.Are there any gift tax implications on the incoming funds/shares ? 4.Are there any gift tax implications if the couple wire funds (not shares)from their joint US bank or joint US Broker to a joint account outside the US ? 5.Are there any gift tax implications if the couple wire funds to separate accounts outside the US.

Thank you . Paris

Costa rican company

You gave me help on forum 6 months ago pertaining to my client havig a Limitado in Costa rica.

I would like to ask you some questions Please call me at 404-261-5822. I am not sure if I file a 5471 or 8865 and if it is too, late to elect to be a parnership. If I could ask questions on phone that would be helpful. I am trying to file returns as voluntary compliance by Sept 23

David Gordon 404-261-5822

5471 and 6046 C

Hello

Some time ago you responded to my query about a zero percent stock holder director in a foreign corporation whose non-resident alien parents own 100%. It was my belief, and you concurred, that as long as there was no beneficial ownership, 5471 did not have to be filed in Category 2 or 3 by the director.

I have got some mixed answers on the Category 2 filing, and I wonder if I may bother you for some further opinion.

One opinion is:

"It appears that you may have an obligation to file Form 5471 under IRC 6046(a)(1)(A) because you were a director of at a time when your parents owned the shares. Under IRC 6046(c), your parents stock would be attributed to you and nothing in IRC 958(b)(1) would preclude such an attribution. Thus, you would be treated as owning 10% or more of the stock, triggering the reporting obligation"

6046 (c) Ownership of stock For purposes of subsection (a), stock owned directly or indirectly by a person (including, in the case of an individual, stock owned by members of his family) shall be taken into account. For purposes of the preceding sentence, the family of an individual shall be considered as including only his brothers and sisters (whether by the whole or half blood), spouse, ancestors, and lineal descendants.

Do you know how the non-resident alien attribution exception would apply for purposes of 6046(c) ? or if there is another override mentioned elsewhere ?

Finally,

6046 also says:

"(b) Form and contents of returns The returns required by subsection (a) shall be in such form and shall set forth, in respect of the foreign corporation, such information as the Secretary prescribes by forms or regulations as necessary for carrying out the provisions of the income tax laws, except that in the case of persons described only in subsection (a)(1)(A) the information required shall be limited to the names and addresses of persons described in subparagraph (B) or (C) of subsection (a)(1). "

So it appears that even if there is a filing requirement, no one would qualify to be reported as there is zero percent US Person ownership.

Any light you can shed on this is appreciated.

category 2 filing

Thank you for responding to my earlier question. This is clearly a poorly drafted area of the code with an exception for non-resident alien construction in some places and not in others.

What should a category 2 filer then provide in the filing ? Since there are no US shareholders, it seems that the filing would just be an empty filing simply identifying the director and reporting no other US persons. Additionally, Schedule G is required which is a set of declarations.

I had seen elsewhere that a Category 2 filer must at least own some stock directly before reporting kicks in, but I can not find a IRC reference to it. The code seems more explicit when a FPHC is involved but not a vanilla corporation.

Thank you again for your time and dialog.

-- Ernest,

With respect to the message you left for me, my citation to section 958(b) was improper. Section 958 is used for several purposes but is not relevant for category 2 filers. As counterintuitive as it may seem, I believe that the advice you have received from your source is accurate. I see no exception to your filing as a category 2 filer.

If the 5471 is late, it would seem that this would be a good case for reasonable cause to avoid any penalties.

Smktax