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Friday, January 28, 2011

[Individual]Where does the income belong to?(Jan-28-2011, 80 days left)

Fruit and tree doctrine will help you identify who is obligated to pay the tax:

  • Income from personal services is taxable to who performs the services
  • Income from property is taxable to the owner of the property
  • Interest income accrues daily—allocate interest income based on the number of days
  • Dividends: taxed to the party who is entitled to receive them

Dividends on stock transferred as gift between declared and record dates is generally taxed to the donor

  • Dividend tax relief

Exception: dividend from certain foreign corporations (for most situation), from tax-exempt entities, do not satisfy the holding period requirement.


PSQ

Source: http://www.irs.gov

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