May 2019 Newsletter

IRS issues final regs on recognition and deferral of foreign currency gain or loss

The IRS recently issued final regulations regarding the Foreign Account Tax Compliance Act. Among other things, the final regs provide compliance requirements and verification procedures for sponsoring entities of foreign financial institutions and certain nonfinancial foreign entities. This article provides an overview of the guidance.

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Offsetting foreign currency option transaction had no economic substance

In Tucker v. Comm., the U.S. Court for the Fifth Circuit affirmed a U.S. Tax Court position that a complex offsetting foreign currency option transaction had no economic substance and, thus, didn’t justify the losses taken by the taxpayer. This article reviews the case, explaining how and why the Fifth Circuit came to this conclusion.

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2018 foreign income/housing exclusions: Residency/presence tests waived for several countries

In a recent Revenue Procedure, the IRS waived the residency and presence tests that apply for purposes of the foreign earned income and foreign housing cost exclusions. This article explains who is a qualified individual under the rules and for which countries the tests have been waived, applicable to the 2018 tax year.

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