CCH International Tax Commentaries
U.S. Portfolio Investment
The purpose of this section entitled nonresidents: U.S. portfolio investments is to explain the basic principles of the source of income rules and the statutory basis for taxation of foreign taxpayer's portfolio and passive income.
Determining the source of income, U.S. or foreign, is essential in determining the U.S. tax consequences of International transactions. U.S. Citizens, U.S. Corporations, and U.S. Resident Aliens are subject to tax in the U.S. on their worldwide income. Code Secs. 1 and 11. U.S. taxpayers who are subject to tax on their worldwide income are provided a foreign tax credit to relieve any possible double tax issues.
Nonresident Aliens and foreign corporations are generally taxed on income which they derive from U.S. sources, whether or not it is connected with the active conduct of a U.S. trade or business. Foreign source income is generally not subject to U.S. taxation.
- Chapter 1: Introduction – Source of Income Rules.
- Chapter 2: Interest Income.
- Chapter 3: Dividend Income.
- Chapter 4: Rents & Royalties.
- Chapter 5: Sale of Personal Property.
- Chapter 6: Services Income.
- Chapter 7: Special Sourcing Rules.
- Chapter 8: U.S. Tax Rules.