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James Bond & Worldwide Income Tax Reporting | International Tax Lawyer & Attorney

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Hello and welcome to Sherayzen Law Office video blog. My name is Eugene Sherayzen and I’m an international tax attorney and owner of Sherayzen Law Office, Ltd. And today we are continuing our blog from the Czech Republic in Karlovy Vary. And in making this video one of my clients was a fan of James Bond. This is the place where ‘Casino Royale’ was filmed in 2006.

And an interesting thought occurred to me: ‘that had James Bond been a resident of the United States, the winnings that he made in this casino would have been taxed in the United States even though he made them here in Karlovy Vary in the Czech Republic.’ The reason for this is the unique rule in US International Tax Law that US Tax Residents, irrespective of their physical residence must report their worldwide income on their US Tax Returns.

So, James Bond, if he were a green card-holder, even though he was not in the United States would have to declare his income from Casino Pupp on his US Tax Returns.

Thank you for watching until next time…

FBAR and Form 8938 May Both Be Required | FBAR FATCA Lawyer

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FBAR requirements are a separate requirement form from Form 8938. The FBAR requirement does not replace the requirement to file a Form 8938; it’s in addition to. So, if you own the assets individually, you might have to file a Form 8938 and FBAR at the same time. And not really at the same time because of a change in the FBAR deadline.

An entity, the domestic entities never have to file Form 8938 but they did have to file FBARs. So the change is really more affecting domestic entities and you know very specific, specified domestic entities with respect to reporting foreign assets.

US Cryptocurrency Taxation | Cryptocurrency Tax Lawyer & Attorney

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Hello and welcome to Sherayzen Law Office video blog; my name is Eugene Sherayzen. I am an international tax attorney and owner of Sherayzen Law Office, Ltd. Today we are continuing our series of blogs from the Czech Republic and I would like to discuss a very interesting issue. An issue that concerns the growing sector of our economy, indeed a growing sector of world economy: Cryptocurrency.

Today, I would like to discuss how cryptocurrency is taxed from a US perspective. The first and most important thing to understand is that despite its name, cryptocurrency, the IRS would not treat any of the digital currencies as actual currency or money. From the IRS perspective, cryptocurrency is property.

So when you sell cryptocurrency, you generate capital gains. They may be short-term capital gains or long-term capital gains but never-the-less, these will be capital gains. Where do you disclose capital gains? On your US Tax Return, on your Schedule D of Form 1040.

What if you exchange one currency for another? Would this be treated as a reportable event for US Tax Purposes? Yes, absolutely. Barter exchanges are treated as taxable events. So, let’s say you have Bitcoin, and you have Ethereum. Let’s say you decided to exchange 100 Bitcoins for whatever the nominal equivilant number of Ethereum coins. This type of an exchange would be taxable in the United States and reportable in the United States.

An interesting issue arises: what if you were to lose the password to for your for your Bitcoins, for your wallet? Is this a loss or not? Right now we don’t have a clear idea on this issue, but it’s an interesting issue to explore. If we were to take the UK law as a potential guide for how the IRS might address this issue, we would say that, yes as long as you can persuade the IRS that the password has been irrefutably lost, then you can claim a capital loss. What if Bitcoins were stolen from you? That is an interesting issue as well because under the UK law, these Bitcoins are still owned by you, despite being stolen. How would the IRS look at it? Right now, we do not know ; it is too early to say and there hasn’t been sufficient guidance on this point.

If you would like to find out more about how your cryptocurrency will be taxed in the United States and how to properly report it in the United States, you should call me at (952) 500-8159 or you can email me at [email protected]. Thank you for watching, until the next time.

Asian Americans in Europe: US Tax Compliance | International Tax Attorney

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Hello and welcome to Sherayzen Law Office Video Blog. My name is Eugene Sherayzen; I’m an international tax attorney and owner of Sherayzen Law Office Ltd.

Today, we are continuing our series of blogs from the Czech Republic and we’re here in Karlovy Vary and while walking the streets of Karlovy Vary, I noticed an interesting phenomenon. There are a lot of people from China, South Korea, and Southeast Asia here in Karlovy Vary; some of them are here as tourists; some of them reside in Europe; and some of them actually reside in the United States.

For those who reside in the United States, the issue of US Tax Compliance should be ever-present on their minds. The problem is that a lot of those individuals open foreign bank accounts here in the Czech Republic or elsewhere in Europe and they forget to disclose them and once the IRS finds out about it, the IRS will impose penalties, civil & potentially even criminal. The penalties can be wide-in-range from FBAR penalties to Form 8938 penalties and even penalties associated with PFIC compliance.

If you would like to learn more about your US Tax Compliance requirements, you should contact me directly at (952) 500-8159 or email me at [email protected].

Thank you for watching, until next time.

Worldwide Income Reporting Myths | US International Tax Lawyer & Attorney

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Hi and welcome to Sherayzen Law Office video blog. My name is Eugene Sherayzen and I’m an international tax attorney and owner of Sherayzen Law Office, Ltd. and today we are continuing our series of blogs from the Czech Republic. Right now, I’m on the way to Prague from Karlovy Vary and I wanted to make this blog about the Worldwide Income Reporting, particularly about the myths which surround the worldwide reporting requirement.

The general rule is that if you are a US Tax Resident that you must disclose your worldwide income on your US Tax Returns; but there are a number of myths on the internet especially which say that there are certain exceptions to this requirement. So, lets go over these worldwide income reporting myths.

The most frequent and the most dangerous myth is the ‘local taxation’ myth. Under the ‘local taxation’ myth, a taxpayer believes that he doesn’t have to report his income, his foreign income because it is subject to local taxation. So, for example if you have a foreign account in the Czech Republic and there’s tax withholding on all the income produced by the account then you don’t have to report the income. And sometimes some people even believe that you don’t even have to report the account itself. This is a completely false assumption; there is no basis for it whatsoever. Even if income is subject to local taxation, it still needs to be reported on your US Tax Return.

The second myth which is also very common is that you only pay taxes in the jurisdiction where you earned the income; the so called ‘territorial taxation’ myth. This myth is very popular for a very good reason. A lot of countries actually would not tax income that is earned in another jurisdiction. Unfortunately, the United States is not one of them. Under US Tax Law irrespective of where the income is earned, it’s taxed in the United States as long as you are a US Tax Resident. The fact that it’s earned in another jurisdiction has no influence on the tax law whatsoever.

And then finally, there is an interesting belief that is held by some people is that there is some sort of ‘de minimis’ exception to the worldwide reporting requirement. And that is also not correct.There is no de minimis exception to the worldwide income reporting requirement. Even if you earn one dollar of foreign income, you still need to report it. Even if you earn ten dollars, one hundred dollars, it doesn’t matter; you still have to report it. Now I believe the reason why this myth exists is because of the $10,000 interest in the foreign account requirement for FBAR purposes. So FBAR as you may know is an information return that US Persons must file in the United States. It’s not part of the internal revenue code but it is administered by the IRS. And in order to be subject to FBAR filing requirement, you have to have at least $10,000 in your foreign accounts. Technically speaking, the highest aggregate value should be in excess of $10,000, but that amount $10,000 kind of sticks in people’s minds and they think this is the amount of income that you have to have in order for foreign income to be reportable on your US Tax Return. That is also not true: $10,000 is something that is relevant to FBAR only and has nothing to do with actual income, it has to do with balances.

So, these are the three most common worldwide income exception myths. If you follow any one of them, you are most likely not in compliance with US Tax Laws and if this is the case, I suggest that you contact me as soon as possible. You can call me at (952) 500-8159 or you can email me at [email protected]. Thank you for watching and until the next time.