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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13328
Experience:  15years with H & R Block. Divisional leader, Instructor
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I have a wuestion regarding reporting obligations. Can you

Customer Question

Hi. I have a wuestion regarding reporting obligations. Can you answer it?
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: A NRA just became a green card holder in FY 2016 (he received the card August 10). On January 2016 he revoke a revocable grantor trust and invested the moneys in a start up via debt (he now has an interest bearing account receivable). Does the green card holder has to report the interest bearing account receivable? Thnks
JA: Is there anything else important you think the Accountant should know?
Customer: that's all
Submitted: 3 months ago.
Category: Tax
Expert:  Robin D. replied 3 months ago.

Hello

You are a resident, for U.S. federal tax purposes, if you are a Lawful Permanent Resident of the United States at any time during the calendar year. This is known as the "green card" test.

If you meet the green card test at anytime during the calendar year, but do not meet the substantial presence test for that year, your residency starting date is the first day on which you are present in the United States as a Lawful Permanent Resident. This would be the August date after Green Card received.

However, an alien who has been present in the United States at any time during a calendar year as a Lawful Permanent Resident may choose to be treated as a resident alien for the entire calendar year.

Was he here in the US in 2015? If he was not in the US for the time required to be a resident alien prior to getting the Green Card then he can claim dual status and not claim the interest. If he was in the US long enough then he has to report it.

You have to look at when he first came to the US and stayed.

Customer: replied 3 months ago.
The receivable will not produce any interest until 2021. He is resident of a treaty country. Closer connection with the other country and tie-breaker rules of paragraph 4 Article 4 applies, therefore is will be not deemed resident in USA for 2016.
I understand from your answer that reporting obligations are only related to interest income? The transaction per se (a loan with a non related party) does not have to be reported although it is with an offshore entity?
Expert:  Robin D. replied 3 months ago.

A loan would not be reported.