That probably explains it, all right <G> .

Katie

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Dick Adams wrote:
- quote -

Accepted. my apologies. However, the Embassy example which
David Woods came up with WOULD work.

================================================== ==========
Moderator:
Apologies are unnecessary, but graciously accepted. This
must mean that small wager is gone. ;(
================================================== ==========

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katiej_1958[at]yahoo.com (Katie Jaques) wrote:

- quote -

I defer to your higher wisdom.

I suspect that is why no aliens from other galaxies
have applied for US citizenship....

))) Andy

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Dick Adams wrote:

- quote -

(Repeating my previous post, with a little reference material.)

The Russian Embassy IS part of Russia. To quote publication 54:

"A foreign country is usually any territory (including the
air space and territorial waters) under the sovereignity
of a government other than that of the United States."

It goes on to say that submarine seabeds are included, and
that US possessions and protectorates are not included.

So I would place a small wager on THIS example.

============================================
Moderator: How large can you make small?
============================================

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- quote -

Many years ago Hughes Aircraft was involved in a dispute
over whether a diamond window for one of our spacecraft
would be subject to import duties. The Company argued that
since it was in this country for a transitory purpose (to be
installed in the spacecraft) and would then be re-exported
to outer space, no customs duties were owed. The case was
tried in some international court and we won. Outer space is
now considered to be a foreign country just like the
terrestrial ones. Foreign income laws apply.

Linda Dorfmont E.A., CFP, CSA

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Dick Adams wrote:
- quote -

Do you have authority for that? From the uninformed
position of goddammed lawyer, I'd guess a good argument
could be made on the other side.

Stu

================================================== ==========
Moderator:
Get a copy of an annotated version of the Code. Go to
Section 911. Section 2 of the supporting case law is
labeled "Purpose". Read Section 2 and then, if needed,
read the supporting case law. You must be both outside of
the United States and in a foreign country. In both of
the cases above, at best you are in property owned by a
foreign country, but not in a foreign country.

Then there is the "Burden of Proof of Bona Fide Residence"
section.
================================================== ==========

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Andy wrote:
- quote -

It's very real.
See http://spaceflight.nasa.gov/station/index.html

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Andy wrote:
- quote -

It wasn't in orbit over California. The County decided
that it was a mobile building (?) for the purpose of
tax law, and its last fixed location was where it was
manufactured. Where it was sited was irrelevant.

California, not the owners of the satellite, sued the
County to remove the satellite from the tax rolls.

....

- quote -

It's under construction. I think it does have a permanent,
rotating, staff of three or so.

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cj.green[at]worldnet.att.net (Christopher Green) wrote:
- quote -

If you are the sole shareholder of a foreign corporation,
you probably fall under the "controlled foreign corporation"
regime of subpart F. Some of the income of the Polish
corporation may in fact be taxable by the United States to
you as a shareholder. If you want anywhere near an accurate
answer on what may be taxable you should consult an
international tax specialist. If you want some idea of the
nightmarish complexity of the CFC issue, just for starters,
read Internal Revenue Code sections 951 and 952. This will
give you some idea of what you are up against.

Timothy E. Kelly, Esq.
Certified Specialist, Taxation Law
State Bar of California
Board of Legal Specialization

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"Arthur L. Rubin" <ronnirubin[at]sprintmail.com> wrote:
- quote -

You think you disagree? But not strongly enough to come up
with a wager!

- quote -

Outside the United States once counted and, of course, it
was abused beyond anything I could conjure up. Remember as
an auditor you have to know how to cheat in order to spot a
cheater. So Section 911 was amended in 1962 so that outside
the United States does not mean squat. You must be inside
the foreign country.

So in your scenario above leaves you with a US citizen
without a tax home.

But let us say a US citizen is married and has residence in
Sydney, Australia where his spouse works. Let us say further
that this US Citizen is a mate on a commercial vessel that
carries passengers and freight back and forth to Wellington,
New Zealand. I do not care about the registry of the vessel,
he gets the FEIE because he really lives in Sydney.

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"David Woods, EA, ChFC, CLU" <dwoods[at]woods-financial.com> "Dick Adams" <rdadams[at]smart.net> wrote:
- quote -

No more than a US citizen going to work in a foreign embassy
in New York. taking up domicile, residence, etc, and never
leaving the building. It is not the country of Russia. It
is simply Russian property located within the United States.

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Dick Adams wrote:

- quote -

I suppose the only exception to that would be if Russia
makes its space station its embassy to the universe.

Stu

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johnmolinda[at]yahoo.com (John Molinda) wrote:

- quote -

You also need to be aware of how the state where you resided
before you went to Poland will treat you for tax purposes.
Each state defines residence for tax purposes by its own
rules, and they differ from state to state. Some states
would consider you to remain a resident until you return
from Poland and establish a new domicile in another U.S.
state, and will tax all of your foreign source income
(though most will conform to the federal earned income
exclusion). Others would consider you a nonresident, taxable
only on income from sources within the state, from the time
you leave for Poland. You need to investigate the rules of
your own state.

Katie in San Diego
The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.

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David Samuel Barr <dsbarr[at]mindspring.com> wrote:
- quote -

And Capt. Kirk was (will be?) subject to US income tax on
all of his income, including what he earns in outer space
(assuming the laws don't change between our time and his
<G> ). The astronauts are taxed on all of their
compensation.

No limitation to planet earth. The US taxes all income of
US citizens, from all sources.

Katie in San Diego
The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.

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Dick Adams wrote:
- quote -

Actually, I think I disagree. And I have a down-to-earth
hypothetical which might actually exist.

Suppose a US Citizen's residence and domicile was on a
cruise ship, with foreign registry. Would they qualify for
the foreign earned income exclusion? She would certainly be
outside the United States....

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Before anyone wagers with me, be aware that I have studied
Section 911 "every which way as it might apply to me" if I
should leave the United States. At a faculty meeting a few
years ago, a professor who had been born in a foreign
country said "Everybody is trying to find a way to get into
the United States. Dick is the only one trying to leave and
noone wants him." He got a good laugh.

First, it is presence in the foreign country, not absence
from the United States, that counts.

Second, you must be a resident of a foreign country for the
entire tax year. Arriving after January 1st or returning
before December 31st does not count.

Third, you need to meet some criteria for residency, e.g.,
establishing a home for an indefinite period of time and
assimilating into the culture of the country.

Fourth, expect the IRS to challenge your right to FEIE.
Katie Jaques came up with a case of an Airline pilot who
owned a flat in Paris, flew from Paris to New York, stayed
in a hotel in NYC when needed, was engaged to a French
woman, spoke fluent French, and was heavily involved in the
community where he lived. The IRS made him get a court to
side with him.

It is neither easy nor hard to get the FEIE. But the burden
of proof is on the taxpayer.

Dick

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"Dick Adams" <rdadams[at]smart.net> wrote:
- quote -

I don't necessarily disagree, but the question I would
immediately ask is whether the space station was considered
sovereign territory much like a consul or embassy. Then it
WOULD be in a foreign country.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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"David Samuel Barr" <dsbarr[at]mindspring.com> wrote:
- quote -

Internal Revenue Code § 911(b)(1)(B)(ii) disqualifies the
compensation of U.S. government employees from eligibility
for the FEIE.

§ 911. Citizens or residents of the United States living abroad

(b) Foreign earned income
(1) Definition
For purposes of this section—

(B) Certain amounts not included in foreign
earned income
The foreign earned income for an individual shall
not include amounts—
(ii) paid by the United States or an agency thereof
to an employee of the United States or an agency
thereof

Barney Byrd

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David Samuel Barr <dsbarr[at]mindspring.com> wrote:
- quote -

Well, U.S. Astronauts are U.S. government employees and
there are no "Outside the United States" tax breaks for
them. But what if an academic was on the Space Station?
Would he/she get the Foreign Earned Income Exclusion?

Sorry, the answer is no because the Space Station is not a
foreign country. Even if it was owned by Russia, it is not
in Russia.

If you disagree, I would be glad to wager on it.

Dick

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David Samuel Barr <dsbarr[at]mindspring.com> wrote:
- quote -

A year or two ago, California tried to make owners of a
stationary satellite which was in orbit over California pay
property tax on it ....

I suspect that the astronauts don't own the space boat, and
wouldn't be bothered by this. However California may try to
collect state income tax for that portion of their income
which was earned while over California.

A while back Texas wrote into law that liens on the pensions
of Texas residents who had worked in California would not be
enforced....

By the way, do we actually have an International Space
Station, or are you just making that up ?

))) Andy

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