Taxation of international activity: FDAP, ECI and the dual capacity of an employee as a taxpayer

Article Abstract:

The apparent dual taxation of effectively connected income (ECI) under IRC section 871(b) and of fixed or determinable annual or periodic gains, profits and income (FDAP) under section 871(a) can be reconciled by considering normative and economic bases for the tax policy. The foreign employee earning US-source income can be considered to engage in a trade or business and to participate in a firm by investing human capital. Distinguishing the source rules for FDAP from those for foreign tax credits would make the logic of both FDAP and ECI taxation more apparent.

Analysis, Taxation, Foreign corporations, Double taxation, Non-resident aliens, Nonresident aliens, international

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How small businesses really fared under the estate tax provisions of the Taxpayer Relief Act of 1997

Article Abstract:

Benefits to small businesses from changes to estate tax provisions made by the Taxpayer Relief Act of 1997 are not substantial. The complex rules attached to relatively limited tax benefits are disappointing. A lowered interest rate for IRC section 6166 installment payments coupled with the deduction elimination is an example of the type of limited tax relief provided by the provisions. The family-owned business estate tax exclusion added an extremely complex section 2033A with little resultant tax benefit.

Laws, regulations and rules, Farms, Close corporations, Closely held corporations, Estate tax, Estate taxes, Family-owned business enterprises, Family-owned businesses

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