# If you have any US tax inquiries, We are here to help you with your US expat tax questions!



## MyExpatTaxes (10 mo ago)

HI everyone! We are MyExpatTaxes and we’re based in Vienna. MyExpatTaxes is a software that helps Americans living abroad get tax compliant regardless of how complicated their tax situation is. If you have any US tax inquiries, CEO and IRS Enrolled Agent Nathalie Goldstein is here to help answer your US expat tax questions.


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## Moulard (Feb 3, 2017)

OK. I will bite. Here is a question for you..

Pub 514 - states that

"If you are a beneficiary of an estate or trust, you may be able to claim the credit based on your proportionate share of foreign income taxes paid or accrued by the estate or trust. "

Digging around in the IRC... the basis of this seems to be § 901(b)(5)

A naive reading of this seems to suggest that a US Person can claim a foreign tax credit for the foreign income taxes paid or accrued by a foreign trust so long as they are a proportionate to the income that was attributed to the taxpayer.

The context of my question are contributions to an employees' trust which are treated as employee income under § 402(b)(1) but under local tax law are considered income of the trust and thus it is the trust that is liable for the income tax and not the US person employee (Employer contributions to Australian Superannuation in this case)

§ 901(b)(5) seems to be suggesting that in this case, given the income is attributed to the employee then the foreign taxes paid on that income could pass through from the trust to the employee.

Am I reading this right or am I missing something?


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## MyExpatTaxes (10 mo ago)

Hello, Moulard. Apologies for the delayed response.

A Superannuation generally is an employer trust and as such is not a considered a foreign grantor trust. This means that is not considered a disregarded entity for income tax purposes. Deductions earned by the trust cannot pass on to the grantor’s tax return.

Therefore, the trust pays income tax at the trust level on any taxable income and income passes to the beneficiary upon distribution to be taxed on the beneficiary’s personal income tax return.

Hope that helps!


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