<parrisbraeside[at]yahoo.ca> wrote:
- quote -

tks so much, Frederick, Parris, and LK, an enlightened
response from all.

bw

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"bill" <bw1...[at]nospam.com> wrote:

- quote -

Yes, and no

He will be taxed on the investment income in the UK by the
US, whether or not he brings it into the US, assuming he is
filing 1040, 1040A or 1040EZ. So bringing it into US is not
really the deciding factor.

However the treaty comes into play and the US, like many,
gives credit for the taxes paid to a foreign country for
income earned outside of the US. If those taxes exceed the
US taxes on the same income, the US will limit the credit to
the amount it taxes the income.

He needs to explore Form 1116 or get a competent tax
preparer who is familiar with the UK-US tax treaty and
foreign income. These are not people located at your corner
Liberty or HRB storefronts, though both have people who may
have the training. I recommend you let your fingers do the
walking through the yellow pages. (I would offer but my
specialty is Canada-US treaty, not UK-US.)

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- quote -

As a resident alien, the U.S. taxes your U.K. citizen friend
on his worldwide income. Thus the U.S. taxes him on his
U.K. investment income whether or not he brings it into this
country. He reports the income on his U.S. return and
either deducts the foreign taxes paid as an itemized
deduction on Schedule A or claims the foreign tax credit on
Form 1116. See Form 1116 / Instructions and Publication
514.

http://www.irs.gov/pub/irs-pdf/f1116.pdf

http://www.irs.gov/pub/irs-pdf/i1116.pdf

http://www.irs.gov/pub/irs-pdf/p514.pdf

Frederick Lorca

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bill" <bw1945[at]nospam.com> wrote:

- quote -

The answer depends on facts which you have not provided.
The main issues would be his visa status in the US. Does he
have a green card, for example? If he is here on any kind
of permanent residency status, he would have to include his
worldwike income.

Second, what does his wife do? If she files a joint return
with him, he must elect to include his worldwide income in
the US return.

What type of income does not matter. If he can file as a
non-resident (Form 1040NR) only compensation for services in
the US are taxable. Otherwise, all of his income is subject
to US taxes, whether or not he brings the money here.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

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My friend is a UK citizen, married to an American and living
and working in the US.

He has investment income from UK which is taxed there and
claims that if he brings that income into the US, it will be
taxed again here.

My question is the obvious, is this true? And does it
matter what type of income it is?

tks all

bw

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