Residency Status Dictates Tax Treatment Of Gain
June 10, 2006Q: I am a United States resident alien and German national. I recently sold property in Germany and want to know if it is subject to tax in the United States. If so, which tax and how much? My parents gifted me the property but retained all rights to the property until it was sold. Niessbrauch was the form of ownership. A: To determine if the gain is taxable in …
Cashing in a 401(k) to Pay Off Student Loans
June 6, 2006Q: If I cash out a portion of my 401(k) to pay off student loans, will I be penalized the full 10% at tax time or is there a way to get around that penalty? I do understand that there will be an immediate 20% tax withheld when I cash out regardless. M.D. Allen, Texas A: Before we determine whether the 10% penalty will apply, you should know there is …
Be Wary Of ‘Life Settlement’ Transactions
June 1, 2006Q: My two partners and I built a successful business. The business held a large insurance policy on each partner’s life to buy out his interest in case of premature death. We recently sold the firm. Each partner took over the policy on his own life. I am in good health. I don’t need the coverage, and I don’t want to pay the premiums. I have been told that I …
