Straightpoop

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About Straightpoop

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  • Nationality USA
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  • Year of birth 1949

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  1. Owing self-employment tax to the U.S.

      Yes. They are fully refundable taxes. Use Form 1040X and attach a copy of the DUSA 101. When requesting the D-USA101 simply ask that it cover 2020 and 2021 and then one year at a time at the end of subsequent calendar years.    
  2. Bezugsrecht - How to handle in regards to IRS

    This seems to provide all you wanted - and more - on the subject:   Cost Basis - Stock Rights   Hours of "fun" digging for relevant information and performing detailed analysis or . .  . the easy way:  just assume your basis is zero and the proceeds are fully taxable as capital gain (long or short-term depending on the purchase date of the shares whose ownership entitled you to the rights.)  
  3. Making a last will and testament

      No.  A Berliner Testament is a joint will between spouses only whose primary feature is that it BINDS the survivor to its terms, i.e. it becomes unalterable by the survivor upon the death of the 1st spouse. This feature makes them popular with (most men) who want to ensure that a subsequent remarriage of their spouse will preserve assets for his children.   They are much beloved by the Finanzamt since they are among the least tax efficient will forms around.   This website offers 4 variations:   Berliner Testament - 4 kostenlose Muster & Vorlagen als PDF (anwalt-erbrecht.de)   Under no circumstances should you and/or your spouse execute one of these things without getting professional counseling.  
  4. Making a last will and testament

    @LeonG and @JG52   You both address two related topics that too many people simply overlook when doing their "estate" (i.e. death) planning:   1) that wills are only one - and an increasingly less important - instrument of succession planning and   2) failing to review and modify existing or future succession planning to account for a divorce can be disastrous.   Will substitutes - POD/TOD bank and brokerage accounts and deeds, retirement plan (IRA, 401(k), etc.) designations of beneficiary, joint ownership of assets with right of survivorship, Life insurance designations of beneficiary, living trusts, etc. etc. - are not only increasing common they frequently are so widely used that it frequently happens that a decedent's duly executed will need never be offered for probate because the "probate estate" to which it applies is completely empty of any assets.   Because of this - and the general cluelessness of their constituents - many US state legislatures have enacted so-called "revocation on divorce" statutes that provide for the automatic revocation of certain types of beneficiary designations upon divorce.   The problem with this, of course, is that the existence of such statutes may lull people in states where they have not been enacted to assume that they apply to them and therefore don't have to worry about it.   Here is an article (directed at legal professionals) that provides an excellent overview of the problem:   When Clients Fail to Change Beneficiary Designations After Divorce (familylawyermagazine.com)    
  5. Making a last will and testament

      Technically, that is not quite true.   You can indeed "disinherit" your children - and anyone else - completely in Germany.   That is because, technically, the term "disinherit" (enterben) has a much more specific meaning in German language and law than it has in English.   In English, most non-professionals understand the word "heir" as someone who gets "anything of value from a decedent". This could include such things as a specific bequest, a legacy, a life estate, a residual interest, etc.   In Germany, however, an "heir" is a person who succeeds to the same legal rights and liabilities of the decedent either alone or shared with other heirs.  Thus, a person who dies with no will leaving a spouse and 2 children will have 3 "heirs" who will co-own the decedent's assets and will be jointly liable for the payment of his debts.   If, however, the same decedent by will names his main squeeze (as opposed to his spouse) as his "sole heir" he will have technically and perfectly legally completely disinherited his spouse and children.   As has been pointed out, however, both the disinherited spouse and children (in Germany) will (normally) retain so-called "forced share rights" (Pflichtteilsansprüche) that can be enforced against the actual heir.   These rights, however, are a claim to MONEY only.  The disinherited spouse and children will have no right, title or interest in any specific property of the decedent.   Thus, if the decedent owned real property solely in his own name and by will disinherited his spouse and children in favor of a girlfriend, the girlfriend would be sole owner of that real property to the exclusion of the decedent's spouse and children.  The disinherited family can, of course, assert a claim for money against the girlfriend and if she is illiquid she may have to sell the property to satisfy the claims or make some other kind of deal with the disinherited family members.  But, if she has enough to pay the forced share claims, the disinherited family members remain just that:  disinherited.    
  6.   Depends.   Qualified or unqualified dividends?   US source dividends or foreign source?   Can you satisfy the Finanzamt that you actually paid US taxes allocable to your US source dividends?   After allocating your €801 Freibetrag to foreign and US source dividends did you have any German tax liability on foreign source dividends?   See why the CPAs and Steuerberaters want so much money?   Answering these questions will require detailed, time-consuming analysis even if the person doing the analysis is familiar with the issues.
  7. How are joint accounts (outside of Germany) taxed?

      I am not sure you understand the point I am making.   The issue is not whether the FA can apply German gift tax law to foreign assets received as a gift by a German tax resident.   Rather, the issue is whether, under applicable law, a taxable interest in an asset (foreign or otherwise) has been received at all by the purported donee.   If under the circumstances described by the OP, UK law applies to the transaction and the rights and liabilities of the parties to the transaction as determined by UK law would not recognize the acquisition by the OP of any present property interest in the account, then under its internationales Privatrecht (gem. EGBGB) Germany might be bound to accept that UK law determination and apply - or not apply - its gift tax law accordingly.   But, again, I have not researched the EGBGB and for all I know the application of UK law in this case would not produce any difference in outcome with regard to German income and gift tax considerations.   I do know that in the US, local state laws are all over the map with respect to property rights resulting from the creation of "joint" interests in accounts and other assets.  
  8. How are joint accounts (outside of Germany) taxed?

      This would be true if German contract and property law applies to the account.   I have not researched the issue but, given that the contract is between UK residents and UK citizens and a UK bank and that the contract between the bank and its account holders likely includes a clause that selects UK law as the governing law, I would assume that German choice of law rules contained in the EGBGB would respect that contractual choice of law and that the Finanzamt would honor the resulting property and income ownership relationships.   If UK law is similar to the typical statutory laws in many US states, the party who is added as a "signer" but makes no contribution is not regarded as the present owner of any particular interest in the account or its income unless and until they withdraw an amount for their own use and benefit.   Here is a typical explanation of what I mean:   Adding a Secondary Signer or Beneficiary to Your Bank Account | BankFive      
  9.   Well, yes and no.   Generally speaking, the US does not do reciprocity with GF's ("Godless Furriners") and FATCA is no exception.   Attached to the "intergovernmental agreements" (IGA) between the US Treasury and foreign governments (including Germany) implementing FATCA is ANNEX I containing 11 pages of highly detailed reporting and due diligence obligations imposed on GERMAN financial institutions.   The IGA has no such Annex detailing ANY corresponding obligations on US financial institutions.   Despite vague promises of mutual love and affection, reciprocity and striving towards this, that or the other meritorious legislative goals, the "intergovernmental agreements" (IGA) between the US Treasury and foreign governments (including Germany) implementing FATCA IGA impose few, if any, concrete reporting obligations on US financial institutions with respect to holders of "German reportable accounts" that US domestic tax law did not already impose prior to FATCA.   In addition, it should be borne in mind that while this "Intergovernmental Agreement" purports to authorize the disclosure of "tax information" of US citizens to a foreign government, the IGA itself - despite its description in Germany as an "Abkommen" - is NOT a US law or treaty and does not and cannot supercede the general prohibition on releasing such information found in IRC §6903. Indeed, the legal status of these IGAs remains something of a mystery in the US.  (The legal validity of FATCA itself as a US law, however, appears to be settled.)    The "intergovernmental agreement" (IGA) between Germany and the US Treasury implementaing FATCA defines "German reportable accounts" in a way that makes it appear to include the US accounts of US citizens who are tax resident in Germany.   But . . . neither FATCA nor US law requires US financial institutions to do anything to identify such US citizens much less require them to reveal a German tax number.  As a result, the data on information returns from US Financial institutions collected under Chapter 61 of Subtitle A contains nothing that the IRS can use to identify that information as coming from a "German Reportable Account".   Until fairly recently, even nonresident aliens (e.g. German citizens) weren't even required to reveal their German ITIN to US financial institutions when certifying their nonresident alien status under Chapter 3 thus making it extremely difficult for German tax authorities to match that info to a German citizen taxpayer.   (Chapter 3 of the IRC relates to informational returns for the income of nonresident aliens.  No information concerning US citizens - regardless of their residence - is collected under Chapter 3.  Chapter 61 refers to tax returns of all kinds - including 3d party informational returns applicable to US citizens.)   The IGAs with Germany and other countries are intended to ease the burden of compliance that FATCA unilaterally imposes on the financial institutions of all countries OTHER THAN THE USA.   FATCA inspired the OECD's Common Reporting Standard.   But, one of the main reasons the US refused to join the OECD's Common Reporting Standard is because it would require the US to pass legislation that might burden its financial institutions to an extent comparable to the burdens FATCA unilaterally imposes on all foreign financial institutions worldwide.  That would be politically unacceptable in the US.   We don't do reciprocity if we don't have to.        
  10. @jamiegw   Your information on German inheritance tax is correct.  You get a €400K "Freibetrag" but the amount that exceeds that will be subject to German inheritance tax rates applicable to persons in Klasse I.   At recent exchange rates (the one in effect on date of death will apply) the total value will be ca. €750K so your tax will be 15% (the Klasse I rate for taxable values greater than €300K and less than €600K) of €350K (the difference between €750K and €400K).   Since the real estate is located in the UK German domestic tax law (there is no death tax treaty between the UK and Germany) would allow you to claim a credit for the portion of any UK death (inheritance and/or estate) taxes allocable to the UK realty. Since you had no such tax liability there will be no credit.   It is also my understanding that upon sale of the UK realty you should not suffer any German income tax consequences if the property was owned by you or your mother for at least 10 years prior to sale.    That rule will not necessarily apply to any other assets you may have inherited (stocks, bonds, collectibles, etc.) which will have a "carry-over" basis for German tax purposes, i.e. your mother's basis. Note, however, that for purposes of computing a holding period that might exclude a gain from German income taxation, your mother's date of acquisition will also "carry over" to you.   But you need to confirm all of this with a qualified Steuerberater.      
  11. German Inheritance Laws

    @pappnase   My experience has been that the death of a key family member can reveal long-hidden but deep fractures fraught with potential conflicts that like a volcano can either continue to simmer slowly or suddenly explode.   I also note that time not only can heal all wounds it can also allow the creation of stresses and strains from reordered relationships and developments that can inflict them.   Since most of the potential problems of an EG can be best solved before death and that option is not available to you, you really have no choice but to be optimistic. But do not discount the words of caution and wisdom offered by @Sannerl.  At the very first hint of a potential problem (e.g. a child marries and the new in-law begins to exert pressure on your child to raise cash for their own needs:  new house, new car, etc. etc. ad infinitum, the time may then come to formalize your oral arrangements either as part of an EG Auseinandersetzung and/or in connection with your own estate planning arrangements.      
  12. German Inheritance Laws

      First, let me express my deepest sympathy for what you are going through. I've been there and I know the toll this must be taking on you.   The situation for you and your children following your wife's death will be a relatively simple one.   The absence of a will rules out any application or discussion of Germany's Pflichtteilanspruch rules since only a will that diminishes the intestate share of certain statutorily defined persons would trigger these rules.  So anything on that subject is simply irrelevant to your situation.   You have correctly found that in the absence of a will German intestate succession laws will allocate ownership of your wife's "estate" (Nachlaß) 1/2+1/4+1/4.  Note, however, that I used the word "allocate" and not "divide".   You and your children will be members of what is known as an Erbengemeinschaft (EG) which is a form of ownership that has characteristics of joint ownership and/or partnership.  The Erbengemeinschaft will hold title to the entirety of each item of property formerly belonging to your wife - including her 1/2 interest in the marital home - and through the EG each member will have their own undivided interest.   An EG is sometimes described by German lawyers as the "antechamber to Hell."   However, in the situation you describe where all family members appear to have a healthy regard for each other, the continued existence of an EG may prove to be manageable.   The EG continues in effect until it has been completely dissolved or wound-up through what is known as an "Auseinandersetzung".  The best English word for this would be a "partition" action at law or settlement.  The competing interests and claims of the EG members can be settled in myriad ways.    Inheritance tax issues can complicate matters but only if the values exceed certain exemption amounts.  Your exemption amount will be €500K and that of your children €400K EACH.   If you intend to continue to reside in your home that you share with your wife and your children agree with this disposition there is no obvious reason for them to disclaim their interests.  Nor will it be necessary for them to sign any contracts or other agreements.  If you decide to dispose of the property, of course, your children will have the right to claim their share of the proceeds (1/4 x 1/2 + 1/4 x 1/2 = 1/8 + 1/8 = 1/4).  If you die and leave the property to them they will each inherit only 1/2 of your 3/4 interest and will then own it 50-50.   If dissension arises in your relationships things could get ugly ("the antechamber to Hell" I mentioned earlier).  If one or more of the children wants to sell their share it may be necessary to either negotiate a buy-out or, if the cash is not available, then simply put the property up for sale and divide the proceeds.   Anyhow, this is just a brief introduction to a topic that can be enormously complicated or quite simple.    
  13. How to declare property inheritance in foreign country?

    @seper    You should be in the clear with respect to moving the proceeds to Germany.   The operative number is the fair market value of the property as of the date your mother died expressed in EUR at the rate in effect on that date.  If a subsequent sale produces a much larger number which exceeds the €400K Freibetrag then the FA (assuming it learns of such a sale) might challenge your original valuation.  So if you think there will be substantial appreciation and it might be a close call then an appraisal - even at this late date - might be useful.   The 400K Freibetrag applies to taxable gifts made within a 10-year "look back" period as of the date of the most recent gift.  Thus, a gift from your mother made more than 10 years prior to her death would not count against the Freibetrag.  In other words, the Freibetrag renews every 10 years.  Since the Freibetrag is dependent upon the relationship between donor and donee it logically ends with the death of either party to that relationship.   If there is in fact a death tax treaty (as opposed to an income tax treaty) between Germany and the country where the property is located that treaty will likely assign the primary right to tax the value of real estate to the country where the property was located.  If that is the case then even if the 400K threshold were exceeded Germany would give you a credit against German inheritance taxes for the taxes imposed by the country where the property was located.   NB:  this would be true even if there were no inheritance tax treaty because German domestic tax law would give you the credit.      
  14. Taxation of Stock gains

      That will likely not be enough.   You need to substantiate:   a.    that you actually paid US taxes on dividends from whatever source b.    the amount of tax allocable to those dividends - as opposed to other types of income (e.g. long-term capital gains, interest, etc.)  b.    that a specified amount of the tax paid on those dividends is allocable to US-source dividends.   Since some US dividends are taxable at ordinary rates ("unqualified") and others ("qualified") dividends are taxed at a maximum 15% (20% for high-rollers) rate, if you have both types of US source dividends you will have to prove the US taxes allocable to each type.   Your US tax return itself will not help - except to get you past the threshold question as to whether you paid any US taxes at all because it does not break down income by source.  That you will have to do using brokerage statements, etc.  (Your tax preparer may or may not be able to help since many domestic preparers do not have a clue about US "source rules".   Moreover, the FA may insist on proof that your copy of your tax return truly reflects your US tax liability.  There being no "Bescheid" in the US tax system, you may have to obtain a return transcript from the IRS to prove that the IRS actually received your return and processed it with the same results as those shown on your copy.  (This, by the way, can be easily done online at the IRS website and because it is fully automated you'll have the transcript in about 4-6 weeks.)   If you were taxed on unqualified dividends, you will need to show the allocation of your tax on ordinary income items to the amount of your US-source unqualified dividends that were included in your taxable income.   If you were taxed on qualified dividends or had long-term capital gains, your US tax is computed using the "Qualified Dividends and Capital Gains Tax Worksheet".  That document/form will not appear on either your own return or the IRS transcript.  If you used software to do your taxes (or a preparer) the software will usually allow this computation to be printed out.  You can then use that to allocate the tax numbers it shows to the US-source qualified dividends.   Simple, no?  
  15. Flatex dumps US citizens

    To whom it may concern:   Citing the intolerable burden of dealing with US tax and regulatory authority Flatex has given (at least one of) its US citizen/person clients ordinary notice of termination effective as of the end of February 2022.