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$147,000. Social Security and Supple-
mental Security Income (SSI) benefits The court in Filler Contributors
were increased by 5.9%. David R. Baldwin, CPA, is a partner
Guidance on reporting quali- found that the with Baldwin & Baldwin PLLC in Phoe-
fied wages: The IRS and Treasury taxpayer transferred nix. Katie Bowles, CPA, is a tax senior
require certain employers to report manager at Deloitte & Touche LLP in
to employees the amount of qualified the patent to a Costa Mesa, Calif. Christina Figueroa,
related party. CPA, is a partner with PwC LLP in Los
leave wages paid to the employees for
leave provided during the period from Therefore, gain on Angeles. Mary Kay Foss is a CPA in
Jan. 1, 2021, to Sept. 30, 2021. Those Walnut Creek, Calif. Shannon Hudson,
the sale of the patent
employers should report the amount CPA, MST, is a founding partner of Altair
of qualified leave wages to employees is not eligible for Group PLLC in Bedford, N.H. David H.
either on Form W-2, box 14, “Other,” Kirk, CPA/PFS, is a partner with Ernst
or in a separate statement provided capital gain treatment & Young in Washington, D.C. Michael
under Sec. 1235(d). Levy, CPA, is a partner with Crowe LLP
with Form W-2.40
in New York City. Dana McCartney,
Sec. 1411: Net investment CPA, is a partner with Maxwell Locke
income tax and foreign tax & Ritter LLP in Austin, Texas. Darren
credits Form 8275, Disclosure Statement. The Neuschwander, CPA, is a managing

In Toulouse,41 the taxpayer offset net taxpayer’s position was that the treaties member with Green, Neuschwander
investment income tax of $63,632 under with the two countries have provisions & Manning LLC, a virtual CPA firm with
Sec. 1411 by foreign tax credits on her for the avoidance of double taxation. members across the country. Robert
2013 individual tax return. The taxpayer The Tax Court granted summary judg- Tobey, CPA, is a partner with Grassi
was a U.S. citizen residing overseas and ment upholding the IRS’s position, Advisors & Accountants in New York
had large foreign tax credit carryovers finding that the treaties provide general City. Mr. Neuschwander is the chair, Mr.
from France and Italy. The taxpayer protection but not absolute protection Baldwin is the immediate past chair, and
argued provisions in the United States– from double taxation. In the situation the other authors are members of the
France (Article 24(2)(a)) and United here, the foreign tax credit applies to AICPA Individual & Self-Employed Tax
States–Italy (Article 23(2)(a)) income income tax under Chapter 1, not the Technical Resource Panel. For more
tax treaties entitled her to a foreign tax investment income tax of Sec. 1411 information about this article, contact
credit. She disclosed this by attaching under Chapter 2. She could not use thetaxadviser@aicpa.org.
to her tax return Form 8833, Treaty- foreign tax credits to offset her net in-
Based Return Position Disclosure, and vestment income tax. ■

40. Notice 2021-53. 41. Toulouse, 157 T.C. 49 (2021).

AICPA RESOURCES

CPE self-study Tax Section resources
Individual Tax Fundamentals — Tax Staff Essentials Annual Tax Compliance Kit
Intermediate Individual Taxation — Tax Staff Essentials Tax Season Library
Individual Income Taxation Library

For more information or to make a purchase, visit aicpa.org/cpe-learning or call the Institute at 888-777-7077.

www.thetaxadviser.com March 2022 37