International Tax and Estate Planning - Assignment Example

However, for married decedents of these non resident aliens, the question of whether they are going o be subject to taxing is determined by a number of factors including the property regime applicable to their marriage. If the person getting the property is a noncitizen (an "alien") is indeed a "nonresident" of the United States, then they may not be subject to any tax payment. Explanation: the US tax rules are designed to change to reflect the kind of property that an alien or nonresident is maintaining.

A facts and circumstances test is usually used to determine if a nonresident taxpayer is engaged in a U.S. trade or business. A nonresident alien who is carrying out personal services in the US is generally considered to be engaged in a business although there are some exemptions there are exceptions. In this regard, if the property identified in question two was a hotel that is doing profitable business as opposed to a family holiday home, the tax rules would change. Explanation: insurance proceeds are not considered to be in situ property, or property situated in the United States, regardless of whether the issuing company is in the USA or in another country.

However, some rules apply in this case. For instance, the insurance has to be on the decedent and not the person benefiting from it. This means that in this case, the proceeds from the insurance cover will not be considered to be US situ property. Answer: the amount that such a person will pay will be determined by a number of factors. To begin with, it there is a treaty that protects such a person from paying tax, or that delimits the amount o tax that he or she is supposed to pay, this will be considered.

At the same time, such a person who is entitled to treaty benefits can also avoid taxation if he or she does not have a permanent establishment, in the U.S. through which foreign business is operated. Explanation: this is necessary in order for the tax man to know how much tax is applicable for that