Investing in DC Zone assets.
Beginning in 2003, investments in District of Columbia Enterprise
Zone (DC Zone) assets held more than 5 years will qualify for a
special tax benefit. If you sell or trade a DC Zone asset at a gain,
you will not have to include any qualified capital gain in your gross
income. This exclusion applies to an interest in, or property of,
certain businesses operating in the District of Columbia. For more
information, see Publication 954,
Tax Incentives for Empowerment
Zones and Other Distressed Communities.
U.S. property acquired from a foreign person.
If you acquire a U.S. real property interest from a foreign person
or firm, you may have to withhold income tax on the amount you pay for
the property (including cash, the fair market value of other property,
and any assumed liability). Domestic or foreign corporations,
partnerships, trusts, and estates may also have to withhold on certain
distributions and other transactions involving U.S. real property
interests. If you fail to withhold, you may be held liable for the
tax, penalties that apply, and interest. For more information, see
Publication 515,
Withholding of Tax on Nonresident Aliens and
Foreign Corporations.
Foreign source income.
If you are a U.S. citizen with investment income from sources
outside the United States (foreign income), you must report that
income on your tax return unless it is exempt by U.S. law. This is
true whether you reside inside or outside the United States and
whether or not you receive a Form 1099 from the foreign payer.
Alien's individual taxpayer identification number (ITIN).
The IRS will issue an ITIN to a nonresident or resident alien who
does not have and is not eligible to get a social security number
(SSN). To apply for an ITIN, file Form W-7, Application for
IRS Individual Taxpayer Identification Number with the IRS.
Enter your ITIN wherever an SSN is requested on a tax return. If you
must include another person's SSN on your return and that person does
not have and cannot get an SSN, enter that person's ITIN.
An ITIN is for tax use only. It does not entitle you to social
security benefits or change your employment or immigration status
under U.S. law.
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