Apartment in Russia

[Gator]

I realise that, but do those treaties preclude double taxation of their citizens living overseas?  Ours do.

Foreign taxes paid under these treaties are not deductions but credits when determining US FIT (Federal Income Tax). 

Most countries tax on the basis of residency.   The US does not and will tax a US citizen's  foreign earned income  unless one was residing abroad for (I forget) 12 or 18 months.

[Boethius]

No, that's inaccurate.
 
Tax treaties only exist to avoid double taxation.  So, where tax is paid to two jurisdictions, the treaty is relied on to determine where the tax will be paid.  It can still be paid in both jurisdictions, but to the extent the tax is paid to two jurisdictions, it is reduced by treaty.

[Gator]

I do not know which country pockets the tax, and I don't really care.  I can comment only on my individual situation. 

If foreign taxes are deducted from dividends distributed to me by a foreign company, I receive a credit towards my US FIT.  The foreign tax I paid is subtracted from what I owe Uncle Sam.  This is a line item on Form 1040.  I am not double taxed. 

I limit my explanation to a small universe, namely liquid, public securities for companies from G8 countries, and I presume each has a reciprocal tax treaty with the US.  YMMV. 

[Boethius]

Yes, but there are many situations where you would not receive such a deduction (which works the same way here).  That is what treaties are intended to catch.

[ML]

Does the USA not have a double-taxation exemption agreement with any other countries?  It would appear from this article in "Time" magazine (which I realise is a couple of years old) that yours is the only country in the world with these draconian rules.

http://world.time.com/2013/01/31/mister-taxman-why-some-americans-working-abroad-are-ditching-their-citizenships/

I said that on USA tax return, you must report all income received anywhere in the world.

However, there are provisions that you can then subtract from your USA tax bill taxes that you paid to certain other countries.

Just which these countries are and under what conditions is always changing.  Can be a nightmare, of course.

[KenInUtah]

Thanks all for the responses.  I understand everyone's point and the more I think about it, the more it does make sense for her to keep it.  Maybe "Red Flag" was a poor choice of words in my post.  I wanted to know if it was normal.  It seems it is and sounds like its a good idea.  Thanks for the insight guys!

[AC]

Thanks all for the responses.  I understand everyone's point and the more I think about it, the more it does make sense for her to keep it.  Maybe "Red Flag" was a poor choice of words in my post.  I wanted to know if it was normal.  It seems it is and sounds like its a good idea.  Thanks for the insight guys!

Welcome to the forum Ken.  Your concern was entirely normal and to think of it possibly as a red flag also normal.  And normal for her to want to keep her property and rent it for income.

[ML]

Welcome to the forum Ken.  Your concern was entirely normal and to think of it possibly as a red flag also normal.  And normal for her to want to keep her property and rent it for income.

This is a potential big problem or perhaps a red flag for the future of this forum.

If everyone becomes normal, there will be no fun here.

Our fun is based on the collective members who are not normal in any sense.

[LiveFromUkraine]

 Looking for red flags after asking someone to marry them is normal now.  haha 


Ken, glad you're back and took some time to absorb some of the comments.  I can't imagine anyone here not wanting you to succeed so please keep that in mind when reading the responses.  Good luck and enjoy the roller coaster ride.