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Discussion Forum Index --> Tax Questions --> Funds transferred from a foreign country
KathleenLemon (talk|edits) said:
| 2 July 2007
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| I have a new client who has a business in Tokyo. He tranferred money into the U.S. from Japan. He was a resident alien at the time but now has a green card. The money in Japan was previously taxed money in that foreign country. Does anyone have guidance/information on the treatment of monies earned in a foreign country by a resident alien which were taxed in that country and subsequently tranferred to U.S.? He seems to think that if he had his green card at the time of the transfer that those funds would be taxable, but that because he did not have his green card they would not be?!? Something he read - also, he's an engineer.
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Sandysea (talk|edits) said:
| 2 July 2007
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| As a RA, he would be taxed on worldwide income whether or not he had a green card. As a RA, he met the substantial presence test and would have been taxed on this income, taking a treaty exemption if applicable.
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Riley2 (talk|edits) said:
| 2 July 2007
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| Kathleen, the real question is whether he was a green card holder at the time he realized the income.
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Pegoo (talk|edits) said:
| 2 July 2007
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| Did the IRS question this or is this just bar talk?
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KathleenLemon (talk|edits) said:
| 6 July 2007
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| Riley1 - No he was not a green card holder at the time he realized the income.
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Riley2 (talk|edits) said:
| 6 July 2007
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| If the client was neither a green card holder or resident alien under the substantial presence test at the time the income was earned, he has no income tax reporting obligations to the United States for that income.
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Sandysea (talk|edits) said:
| 6 July 2007
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| But he WAS a RA I think Riley. According to her original post, he was a RA (I assume substantial presence test), then he is taxed on world wide income. Of course if he earned this income before he was a RA and only XFERRED it during his RA status, then this would not be treated the same :)
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