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If you are not a citizen of the United States, you might be interested in some of the
tax questions we are commonly asked.
Q. I am in the U.S. but I live in South America. Do I need to file tax
returns?
A. You may be considered a U.S. resident for income tax purposes during the current year
if you have been in the U.S. 31 days or more during the current year, and the sum of the
days you were present in the U.S. during the current year, plus 1/3 of the days you were
present in the U.S. during the first preceding year, plus 1/6 of the days you were present
in the U.S. during the second preceding year, equals or exceeds 183 ("3 year
rule"). Or, if you were in the U.S. for 183 days or more in a year, you are also
considered a resident.
If, by this definition, you are a U.S. resident, you must file a U.S. income tax return
and report your world wide income.
There are exceptions to these residency rules which are too complex to go over in this
brochure. But, even if you qualify for an exemption, a statement must still be filed with
the IRS.
Q. I applied for a "Green Card". How does that affect me?
A. If you applied for a "Green Card" and you meet the substantial presence test
("3 year rule"), you are a U.S. resident. If you have a "Green Card",
you are a U.S. resident for as long as you keep your card.
Q. If I determine that I am a non-resident, might I still have to file a
tax return?
A. Yes! If you own property in the U.S. that is or was rented (or available for rent), you
need to file a tax return even if your lost money. If done correctly, the loss if any,
will offset any gain you may have in the future, or when you sell the property. If you do
not file tax returns within 18 months of the due date of the return, you will lose your
deductions and have to pay a flat 30% tax on your gross rent income. Filing a tax return
can eliminate these pitfalls.
Q. I am considering becoming a U.S. resident. Is there anything I need to
do now?
A. Yes. Pre-immigration planning is important. For example, by recognizing gains while a
non-resident, you can avoid U.S. income tax on the gains once you become a resident.
Q. What if I hold assets through a corporation?
A. Every U.S. corporation must file a tax return. Every non- U.S. corporation that does
business (or rents property) in the U.S. must also file a tax return. There are penalties
for not filing federal or State of Florida income tax returns.
Q. What else do I have to know, in general, about holding assets in the
U.S.?
A. There is more to know than we can really tell you here. As an example:
a) if you own or control a U.S. corporation (or a foreign corporation that does
business in the U.S.) there is a Form 5472 to file.
b) estate taxes can be avoided or postponed (entirely or in part) by creating a special
type of trust.
c) there could be a double level of tax on a corporate real estate gain.
d) there are dividend, interest, portfolio income and income tax treaty provision
questions to consider, among others.
e) there are various penalties for noncompliance.
f) and many other items, too involved for this brief overview.
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