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International Aspects of Mitt Romney’s 2010 Tax Return


Mitt Romney’s 2010 tax return had a number of international related items.  First, he has an interest in, or signature authority over, one or more financial accounts in Switzerland.  See Question 7 on Schedule B.  Presumably, he also filed an FBAR for the Swiss account(s).

Second, he had passive gross foreign source income of $1,525,982, with current year foreign income taxes paid on this income of $67,173.  He also had $81,461 of a carryforward of passive foreign taxes from prior years, and he will carry forward $18,397 of passive foreign tax credits to 2011.  He had an alternative minimum tax credit in the passive basket of of $77,565.  See Forms 1116.

Although he had no general category foreign source income for 2010, he paid $690 of foreign taxes in the general category for 2010, and he carried forward $100,010 of foreign tax credits in the general category to 2010.  His carry forward of general category foreign tax credits to 2011 will be $100,700.

Third, he filed Forms 8621 for seventeen passive foreign investment companies ("PFICs").  Four of these forms he made mark-to-market elections.  Ten of the forms made qualified electing fund (“QEF”) elections.  For one of the forms he appears to have made a QEF election in a prior year.  Lastly, two of the forms related to Code §1291 funds.

Fourth, he filed a Form 8865 to reflect that he had contributed $172,109 to a Cayman Islands limited partnership.

Fifth, he filed Form 5471 to disclose his wholly owned Bermuda investment holding company.  The company had a nominal deficit in current earnings during 2010 and reflected previously taxed income from prior Subpart F Income inclusions of $13,366.

Sixth, he filed two Forms 926 to disclose cash contributions to two Irish corporations.  One of the transfers was for $1,523,419 and the other was for $139,625.  Both contributions were non-taxable Code §351 exchanges.

Tags: 1291 PFICs, Form 1116, Form 5471, Form 8621, Form 8865, Form 926, Other - FBAR