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if i invest into a income producing property in jamaca,what are my tax liabilities in the U.S concerning the tax treaty between the U.S. and Jamaca.

Submitted: 85 days and 14 hours ago.

Category: Tax

Value: $15

Status: CLOSED

Country/State/Province of question: georgia,U.S.

Already Tried:
i have an opportunity to invest in some income producing property in Jamaca as part of an L.L.C. After tax (Jamaican Taxes)profits will be deposited in individual accounts in Barbados.How do Jamaican,U.S. tax treaties apply to this money and when and at what precentage would i be responsible.

Posted by Merlo 85 days and 14 hours ago.

Answer

Hello josie,

Assuming that you are a US citizen or a resident alien of the US, then any income you have from the property in Jamaica must be reported on your US tax return. However, under the terms of the treaty, Jamaica is also allowed to tax you on that income, so you will be allowed to claim a credit for any tax that you also must pay to Jamaica on that same income.

The foreign tax credit would be claimed on Form 1116.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you josie, and let me know if you have more questions. I am happy to help you with whatever I can.

85 days and 14 hours ago.

Reply

Will the money placed in the barbados acount be under the same guide lines.the reason i asked is because barbados is considered a tax haven.i understand this is legal. i guess since the money going to barbados will have been already taxed it doesn`t matter or does it?

Accepted Answer

Hello josie,

If you are a US citizen, then you are required to report your worldwide income from all sources. It will not matter if you deposit that money in to an account in Barbados.

In fact, if you have an account in Barbados which you have signature power over, if that account ever reaches a value of $10,000 or more, it must be reported to the IRS by filing Form TDF 90-22.1

Barbados may be a tax haven if you live there and you are not a US citizen. But the US does not care where you put your money. It is still subject to US tax as long as you are a US citizen or resident alien for tax purposes.

So even though it is legal for you to deposit the money in an account in Barbados or anywhere else, it still does not escape the tax or reporting requirements.

However, as mentioned earlier, you would be allowed to claim a credit for the tax you also pay to Jamaica on this same income, so you really should not end up being taxed twice on this income.

If this was helpful please press the Accept button.

Thank you josie, and let me know if you have more questions.

Accepts:
Expert:	Merlo
Pos. Feedback:	99.8 %
Answered:	8/29/2009

Accountant

25+ years tax consulting. Specializing in returns for US citizens living abroad

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if i invest into a income producing property in jamaca,what are my tax liabilities in the U.S concerning the tax treaty between the U.S. and Jamaca.

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Will the money placed in the barbados acount be under the same guide lines.the reason i asked is because barbados is considered a tax haven.i understand this is legal. i guess since the money going to barbados will have been already taxed it doesn`t matter or does it?

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if i invest into a income producing property in jamaca,what are my tax liabilities in the U.S concerning the tax treaty between the U.S. and Jamaca.

Optional Information

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Reply

Will the money placed in the barbados acount be under the same guide lines.the reason i asked is because barbados is considered a tax haven.i understand this is legal. i guess since the money going to barbados will have been already taxed it doesn`t matter or does it?

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