![]() ![]() Or perhaps there are some foreign losses in the current year that could be taken on Form 1040 that cannot be taken on Form 1040NR. By making the election described here, the taxpayer becomes a resident alien and will be able to take these deductions and thereby reduce his or her Federal income tax liability.Īs you read the description of this election-and what is required to qualify for it-you will probably wonder whether the effort is worth the expected tax savings. The requirements to satisfy are, like many things in tax law, unnecessarily complicated. ![]() ((Internal Revenue Code Section 7701(b)(4)(A).)) In order to make the election for a particular tax year, you must know certain things about the past, and you must accurately predict certain things about the future. Then there are complicated rules for what you do in the current year. Prior Year: Be a Nonresident Alienįirst, you must have been a nonresident alien in the prior year. To be precise, you must not have been a resident alien under the definitions found Internal Revenue Code Section 7701(b)(1)(A) for the prior year.
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