ALI-ABA Course of Study International Trust and Estate Planning ...

2
TABLE OF CONTENTS
PAGE 1
I. INTRODUCTION .............................................................................................................. 1
II. RESIDENCE TESTS UNDER THE CODE ...................................................................... 1
A. Income Tax ............................................................................................................. 1
1. Lawful Permanent Resident........................................................................ 1
2. Substantial Presence Test............................................................................ 2
a. Days of Presence............................................................................. 2
b. Closer Connection Exception ......................................................... 4
c. Residence Starting Date.................................................................. 5
3. First Year Election ...................................................................................... 6
4. Short-Term Nonresidency........................................................................... 7
a. Taxed at progressive rates if greater than withholding tax on U.S.
sources............................................................................................. 7
b. U.S. source income modified to include gain on sale or exchange
of property located in United States, gain on sale or exchange of
stock issued by domestic corporation or debt obligations of U.S.
persons; income or gains of a controlled foreign corporation for the
period ending before changing residence while he owned more
than 50% of vote or value. §877(d). .............................................. 7
c. Compare 30-day rule — "treated" as a resident. §877(g)(1). ........ 7
5. Termination of Residence........................................................................... 7
B. Estate and Gift Tax ................................................................................................. 7
III. RESIDENCE TESTS FOR STATE TAX PURPOSES...................................................... 9
A. State tax rules for determining residency do not necessarily follow federal rules. 9
B. New York................................................................................................................ 9
1. Any person domiciled in New York, unless such person does not maintain
a place of abode in New York, maintains a permanent place of abode
elsewhere and spends in the aggregate not more than 30 days of the
taxable year in New York, or...................................................................... 9
1
Internal Pagination.