Could you please elaborate a little why a corporation would
be better in this case? Please forgive my ignorance but
unless there is a special case that apply to income related
to a foreign source (hence the question) I thought I would
be double taxed if I did this transaction through a
corporation.

Thanks in advance for your help
Regards
-Ali

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"Barney Bird" <barney_bird[at]msn.com> wrote:
- quote -

In my experience, the sourcing rules for software royalties
are very artificial and often quite arcane. If there's a
lot of money involved for you, you should be getting some
hands-on up-close professional advice. Like, different
treaties with different countries lead to different answers
for sourcing software royalties.

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Set up a corporation is the best way to retain your
income and save on tax.

charleszhi[at]att.net

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"Ali Kesermisin" <ak200342000[at]yahoo.com> wrote:

- quote -

Income sourcing is determined by reference to the location
where the services are performed, not the location from
which the compensation is received. Since you presumably
wrote the software source code here in the U.S., the
royalties to be paid to you by the European company will be
U.S. sourced income.

Barney Byrd

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A European company is about to pay a substantial amount to
license a piece of software I wrote in my spare time. Is
there any advantage of this being a foreign source income
for US tax purposes? Can anyone think of any method to
reduce my state + federal tax liability?

I used to file as a sole prop but I may change it if there
is any tax advantage in doing so.

Thank you very much for your suggestions.
Best regards
-Ali

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