1. What is the Foreign Tax Credit (FTC) and how does it work for U.S. citizens living in Germany?
The Foreign Tax Credit (FTC) is a tax credit offered by the United States government to U.S. citizens and residents who pay income taxes to a foreign country on foreign-sourced income. This credit is designed to alleviate the issue of double taxation, where an individual’s income is taxed both by the foreign country in which it was earned and the United States. U.S. citizens living in Germany can benefit from the FTC by claiming a credit on their U.S. tax return for the amount of income tax paid in Germany. To utilize the FTC, individuals must file Form 1116 with their U.S. tax return and provide documentation of the foreign taxes paid. It’s important to note that the FTC is subject to various limitations and restrictions, including the foreign tax credit limitation based on foreign income and the carryover of unused credit. Overall, the FTC provides relief to U.S. citizens living in Germany by reducing their U.S. tax liability on income that has already been subject to foreign taxation.
2. What types of income qualify for the Foreign Tax Credit in Germany for U.S. taxpayers?
U.S. taxpayers can claim the Foreign Tax Credit for taxes paid to Germany on income that is considered taxable both in the United States and Germany. Specifically, the types of income that generally qualify for the Foreign Tax Credit in Germany for U.S. taxpayers include:
1. Employment income: Wages, salaries, bonuses, and other compensation earned through working in Germany.
2. Business income: Profits from operating a business in Germany, including self-employment income.
3. Investment income: Such as interest, dividends, and capital gains from investments held in Germany.
4. Rental income: Income generated from renting out property located in Germany.
5. Pension income: Retirement benefits received from Germany, including social security payments.
It’s important to note that each case is unique and may have specific considerations based on the tax treaty between the United States and Germany. Consulting with a tax professional experienced in international taxation is recommended to ensure compliance with both tax jurisdictions and to maximize the benefits of the Foreign Tax Credit.
3. How do I claim the Foreign Tax Credit on my U.S. tax return while living in Germany?
To claim the Foreign Tax Credit on your U.S. tax return while living in Germany, you will need to follow these steps:
1. Determine your foreign tax credit eligibility: You can claim a credit for foreign taxes paid or accrued on income that is also subject to U.S. tax. Make sure you have paid or accrued taxes to Germany that are considered eligible for the credit under U.S. tax laws.
2. Completing Form 1116: To claim the Foreign Tax Credit, you need to file Form 1116 with your U.S. tax return. This form is used to calculate the amount of credit you can claim based on the foreign taxes paid.
3. Reporting foreign income: You will also need to report your foreign income on your U.S. tax return, including any income subject to foreign taxes. Make sure to accurately report all income and taxes paid to Germany.
4. Avoid double taxation: The purpose of the Foreign Tax Credit is to prevent double taxation on the same income. By claiming the credit, you can offset the taxes you paid to Germany against your U.S. tax liability, reducing the risk of being taxed twice on the same income.
By following these steps and accurately reporting your foreign income and taxes, you can claim the Foreign Tax Credit on your U.S. tax return while living in Germany. It is recommended to consult a tax professional or accountant with expertise in international taxation to ensure compliance with both U.S. and German tax laws.
4. Are there any limitations or restrictions on the Foreign Tax Credit for U.S. citizens in Germany?
1. As a U.S. citizen residing in Germany, you may be eligible to claim a Foreign Tax Credit to mitigate the potential double taxation that may arise from paying taxes to both countries. However, there are certain limitations and restrictions that you should be aware of:
2. The Foreign Tax Credit is subject to specific rules and regulations set forth by the Internal Revenue Service (IRS). One key limitation is that the credit is designed to offset U.S. federal income tax on foreign-sourced income, not foreign tax on U.S.-sourced income. This means that you cannot claim a credit for taxes paid to Germany on income that is also taxable in the U.S.
3. Additionally, the IRS imposes constraints on the amount of foreign taxes that can be credited in a given tax year. The credit cannot exceed the U.S. tax liability attributable to the foreign-sourced income. Any excess foreign taxes paid may be carried back one year or carried forward for up to ten years to offset U.S. tax liabilities in those years.
4. It is crucial to accurately report and document your foreign income and taxes paid to claim the Foreign Tax Credit properly. Any errors or discrepancies in your tax filings could lead to penalties and additional scrutiny from tax authorities in both countries. Therefore, seeking guidance from a tax professional or accountant with expertise in international tax matters is highly recommended to ensure compliance with both U.S. and German tax laws.
5. Can I carry forward any unused Foreign Tax Credits from Germany to future tax years as a U.S. taxpayer?
Yes, as a U.S. taxpayer, you can carry forward any unused Foreign Tax Credits (FTCs) from Germany to future tax years. The Foreign Tax Credit allows U.S. taxpayers to offset their U.S. tax liability by the amount of foreign taxes paid on foreign-sourced income. If you have excess FTCs from Germany that cannot be fully utilized in the current tax year due to limitations or restrictions, such as the FTC limitation rules in U.S. tax law, you can carry forward the unused credits to future tax years. This carryforward provision helps taxpayers maximize the benefit of foreign tax payments and avoid double taxation on the same income. It is important to properly document and report these credits on your U.S. tax return to ensure compliance with IRS regulations and to take advantage of any available tax benefits.
6. What documentation is required to support my Foreign Tax Credit claim for income taxes paid in Germany?
To support your Foreign Tax Credit (FTC) claim for income taxes paid in Germany, you will need to provide the following documentation:
1. Foreign Tax Return: A copy of your completed tax return filed with the German tax authorities, reflecting the taxes paid on the income earned.
2. Form 1116: IRS Form 1116 is used to calculate the Foreign Tax Credit. You will need to complete this form to determine the amount of FTC you are eligible to claim based on the taxes paid in Germany.
3. Proof of Payment: Documentation showing proof of payment of the taxes to the German tax authorities, such as bank statements or receipts.
4. Translated Documents: Any documents in German should be translated into English for the IRS to review and process your claim accurately.
5. Tax Year: Make sure the documentation corresponds to the same tax year for which you are claiming the Foreign Tax Credit.
By providing these documents to the IRS, you can support your claim for the Foreign Tax Credit based on income taxes paid in Germany and ensure that you are receiving the appropriate credit for taxes paid to a foreign government.
7. Are there any differences in claiming the FTC for income earned from employment versus investment income in Germany?
Yes, there are differences in claiming the Foreign Tax Credit (FTC) for income earned from employment versus investment income in Germany as a U.S. citizen. Here are some key points to consider:
1. Income Type: Income earned from employment is typically categorized as “earned income,” while investment income is considered “passive income. The FTC rules may vary depending on the type of income source.
2. Tax Treaty Provisions: The U.S. has a tax treaty with Germany that provides specific guidelines for the treatment of various types of income. These treaty provisions may impact how the FTC is claimed for employment income versus investment income.
3. Source of Income: The source of income (whether it is sourced in the U.S. or Germany) can also affect the eligibility and calculation of the FTC. Different rules may apply based on the source of income.
4. Withholding Taxes: In Germany, taxes are typically withheld from employment income at the source, whereas investment income may not have withholding taxes. The amount of foreign tax paid on each type of income can impact the FTC calculation.
5. Timing of Income: The timing of income recognition can also impact the FTC calculation. For example, if you receive investment income in one tax year and employment income in another, the FTC calculation may differ for each.
6. Documentation Requirements: Different documentation may be required to support the claim for FTC on employment income versus investment income. It is essential to maintain accurate records to substantiate the foreign taxes paid.
7. Income Limitations: The FTC is subject to limitations based on both the foreign taxes paid and the amount of U.S. tax owed on the foreign income. These limitations may vary depending on the type of income being considered.
In conclusion, while the general principles of the FTC apply to both income earned from employment and investment sources in Germany, there are specific differences to consider when claiming the credit for each type of income. It is advisable to consult with a tax professional to ensure proper compliance with the FTC rules and maximize the tax benefits available.
8. How does the Foreign Tax Credit interact with the Foreign Earned Income Exclusion for U.S. citizens in Germany?
The Foreign Tax Credit (FTC) and the Foreign Earned Income Exclusion (FEIE) are both tools provided by the IRS to prevent double taxation for U.S. citizens earning income abroad. Specifically for U.S. citizens in Germany, these two provisions can interact in the following ways:
1. Foreign Tax Credit (FTC) vs. Foreign Earned Income Exclusion (FEIE): U.S. citizens living in Germany can choose between taking the Foreign Tax Credit or the Foreign Earned Income Exclusion to reduce their U.S. tax liability on income earned in Germany, but they cannot use both for the same income.
2. Effective Use of FTC and FEIE: Typically, the Foreign Tax Credit is more beneficial for U.S. citizens in high-tax countries like Germany, as it allows them to offset U.S. taxes on income already taxed in Germany. On the other hand, the Foreign Earned Income Exclusion is often more advantageous for individuals with lower incomes to exclude a portion of their foreign earned income from U.S. taxation altogether.
3. Interplay between FTC and FEIE: If a U.S. citizen in Germany chooses to exclude foreign earned income under the FEIE and also pays foreign taxes to Germany, they may not be able to use those foreign taxes as a foreign tax credit against their U.S. tax liability on the excluded income. This can result in a potential loss of the tax benefit that the FTC would have provided in terms of reducing U.S. taxes on the foreign income.
In conclusion, U.S. citizens living in Germany need to carefully evaluate their individual tax situations and consider factors such as income levels, foreign tax rates, and available deductions to determine whether to utilize the Foreign Tax Credit or the Foreign Earned Income Exclusion to optimize their tax position and avoid double taxation. Consulting with a tax professional who has expertise in international tax matters can provide personalized guidance on navigating the complexities of these tax provisions.
9. Are there any specific rules or considerations for claiming the Foreign Tax Credit for self-employment income in Germany?
When claiming the Foreign Tax Credit (FTC) for self-employment income in Germany as a U.S. citizen, there are several specific rules and considerations to keep in mind:
1. Tax Treaty: The first step is to determine if there is a tax treaty between the U.S. and Germany that addresses the issue of double taxation on self-employment income. The tax treaty may contain provisions related to the foreign tax credit and may impact how you can claim the credit.
2. Qualifying Income: The income must be considered taxable in both the U.S. and Germany to be eligible for the FTC. Self-employment income earned in Germany should be reported on your U.S. tax return, and you may be able to claim a credit for the foreign taxes paid on that income.
3. Form 1116: To claim the Foreign Tax Credit for self-employment income in Germany, you will need to file Form 1116 with your U.S. tax return. This form is used to calculate the amount of foreign tax paid that can be credited against your U.S. tax liability.
4. Limitations: There are limitations on the amount of foreign tax credit that can be claimed, so it’s important to carefully follow the instructions on Form 1116 and ensure that you are not exceeding the allowable credit amount.
5. Documentation: It is crucial to keep accurate records of the foreign taxes paid on your self-employment income in Germany, as well as any documentation related to the calculation of the credit. These records may be requested by the IRS in the event of an audit.
Overall, claiming the Foreign Tax Credit for self-employment income in Germany requires a thorough understanding of the specific rules and considerations involved. Consulting with a tax professional who is well-versed in international tax matters can help ensure that you properly navigate the complexities of claiming the FTC for your self-employment income earned in Germany.
10. Can I claim the Foreign Tax Credit for value-added tax (VAT) paid in Germany as a U.S. taxpayer?
Yes, as a U.S. taxpayer, you can potentially claim the Foreign Tax Credit (FTC) for value-added tax (VAT) paid in Germany. The FTC is designed to prevent double taxation on income earned in a foreign country by allowing taxpayers to offset their U.S. tax liability with taxes paid to foreign governments. Here’s how you can claim the FTC for VAT paid in Germany:
1. Determine if the VAT paid in Germany is considered an income tax or a similar tax for U.S. tax purposes. The FTC generally applies to income, war profits, or excess profits taxes paid to foreign countries, but VAT may also qualify if it meets certain criteria.
2. Ensure that the VAT paid in Germany is on income that is also subject to U.S. taxation. If the VAT is directly related to income that is included in your U.S. tax return, it is more likely to qualify for the FTC.
3. Keep documentation of the VAT paid in Germany, including receipts and records of the transactions. This will be important when claiming the FTC on your U.S. tax return and may be required by the IRS for verification purposes.
4. Use IRS Form 1116, Foreign Tax Credit, to claim the credit on your U.S. tax return. You will need to provide details of the foreign taxes paid, the country where they were paid, and the specific income to which they relate.
It is recommended to consult with a tax professional or accountant familiar with international tax matters to ensure that you are correctly claiming the Foreign Tax Credit for VAT paid in Germany as a U.S. taxpayer.
11. Are there any special rules for claiming the Foreign Tax Credit for income from rental properties in Germany?
When claiming the Foreign Tax Credit for income from rental properties in Germany, there are indeed specific rules that U.S. citizens need to be aware of:
1. Rental Income Reporting: Income generated from rental properties in Germany must be reported in both the U.S. and Germany. U.S. citizens need to include the rental income in their U.S. tax return as well as comply with German tax reporting requirements.
2. Foreign Tax Paid: U.S. citizens can claim the Foreign Tax Credit for the taxes paid in Germany on the rental income. This credit is designed to prevent double taxation on the same income.
3. Limitations: There are specific limitations on the amount of foreign tax credit that can be claimed, which is generally calculated based on the ratio of foreign income to the total income. Any excess credit can typically be carried back one year and carried forward up to 10 years.
4. Documentation: It is crucial to maintain accurate records of the foreign taxes paid, rental income earned, and any related expenses. Proper documentation is essential in case of any audits or inquiries from tax authorities.
5. Treaty Benefits: The U.S. has a tax treaty with Germany, which may impact how the foreign tax credit is applied. It is advisable to review the specific terms of the tax treaty to understand any provisions that may apply to rental income from Germany.
In conclusion, claiming the Foreign Tax Credit for rental income from properties in Germany involves navigating specific rules and limitations to ensure compliance with both U.S. and German tax laws. Seeking professional advice from tax experts familiar with international tax matters can help U.S. citizens effectively utilize the Foreign Tax Credit in such situations.
12. How does the Foreign Tax Credit apply to income from German retirement accounts for U.S. taxpayers?
U.S. taxpayers who have income from German retirement accounts may be eligible to claim a Foreign Tax Credit (FTC) to offset the taxes paid to Germany on that income. Here’s how the Foreign Tax Credit applies to income from German retirement accounts:
1. Eligibility: To claim the Foreign Tax Credit for taxes paid on German retirement account income, the taxpayer must meet certain eligibility criteria outlined by the IRS. Generally, the tax paid to Germany must be an income tax or a tax in lieu of an income tax, and the income must be considered taxable in both countries under the U.S.-Germany tax treaty.
2. Calculation: The Foreign Tax Credit allows U.S. taxpayers to offset the U.S. tax liability on their German retirement income by the amount of foreign tax paid. This can be calculated using Form 1116, which helps determine the credit based on the foreign taxes paid, the amount of foreign income earned, and the taxpayer’s U.S. tax liability.
3. Limitations: There are limitations on the amount of Foreign Tax Credit that can be claimed, which is generally the lesser of the foreign taxes paid or a percentage of the taxpayer’s U.S. tax liability. Taxpayers should be aware of these limitations to ensure they are maximizing their credit while remaining compliant with IRS regulations.
Overall, U.S. taxpayers receiving income from German retirement accounts can potentially benefit from the Foreign Tax Credit to avoid double taxation and reduce their overall tax liability. It is advisable for taxpayers in this situation to consult with a tax professional or accountant who is well-versed in international tax matters to ensure proper compliance with both U.S. and German tax laws.
13. What happens if I receive a tax refund from Germany after claiming the Foreign Tax Credit in the U.S.?
If you receive a tax refund from Germany after claiming the Foreign Tax Credit (FTC) in the U.S., there are a few scenarios that could occur:
1. The refund is considered a recovery of foreign taxes: If the amount refunded to you is considered a recovery of foreign taxes previously claimed as a credit on your U.S. tax return, you may be required to include this amount as income on your U.S. tax return in the year you receive the refund.
2. Adjustments to the FTC claimed: Depending on the specific circumstances of the refund and the taxes involved, you may need to adjust the amount of FTC claimed on your U.S. tax return for the relevant tax year. This adjustment could result in potential changes to your tax liability and potential obligations to the IRS.
3. Potential documentation requirements: It is essential to keep thorough documentation regarding the foreign taxes paid, the refund received, and any adjustments made to the FTC claimed. The IRS may request this documentation in case of an audit or review of your tax return.
4. Consult with a tax professional: Given the complexities involved in claiming the FTC and potential implications of receiving a foreign tax refund, it is advisable to consult with a tax professional or accountant familiar with international taxation to ensure compliance with U.S. tax laws and regulations.
14. Are there any tax treaties between the U.S. and Germany that impact the Foreign Tax Credit for U.S. citizens?
Yes, there is a tax treaty between the United States and Germany that impacts the Foreign Tax Credit (FTC) for U.S. citizens. The tax treaty between the two countries helps to prevent double taxation for individuals and businesses that are subject to taxes in both countries. Specifically, under the tax treaty with Germany, U.S. citizens who pay taxes in Germany may be able to claim a foreign tax credit on their U.S. tax return for the taxes they have paid to the German government. This credit helps to reduce the overall tax burden for U.S. citizens with income or investments in Germany. Additionally, the tax treaty may provide provisions for determining the tax treatment of specific types of income, such as dividends and royalties, which can impact the calculation of the FTC for U.S. citizens with ties to Germany.
15. Can I claim the Foreign Tax Credit for taxes paid to German local authorities as well as federal taxes?
Yes, as a U.S. citizen, you can claim the Foreign Tax Credit (FTC) for taxes paid to both German local authorities and federal taxes. The Foreign Tax Credit allows you to offset the taxes you paid to a foreign government against your U.S. tax liability on the same income. In the case of Germany, both local taxes and federal taxes are eligible for the credit, as long as these taxes are considered income taxes in both jurisdictions. To claim the credit, you would need to file Form 1116 with your U.S. tax return and provide documentation of the foreign taxes paid. Make sure to keep detailed records of the taxes paid to both the German local authorities and federal government in order to accurately claim the credit on your U.S. tax return.
1. The Foreign Tax Credit is generally limited to the amount of U.S. tax that would be attributable to the foreign income. If you paid more foreign income taxes than the U.S. tax on that income, you may be able to carry forward the excess credits to future tax years.
2. It’s important to note that there are specific rules and limitations that apply when claiming the Foreign Tax Credit, so it’s advisable to consult with a tax professional or accountant who is knowledgeable about international tax laws to ensure that you are maximizing your tax benefits while remaining compliant with both U.S. and German tax regulations.
16. How does the Foreign Tax Credit apply to capital gains taxes paid in Germany by U.S. taxpayers?
The Foreign Tax Credit (FTC) is a provision in the U.S. tax code that allows U.S. taxpayers to offset the taxes they have paid to foreign governments on their foreign-sourced income against their U.S. tax liability. When it comes to capital gains taxes paid in Germany by U.S. taxpayers, the FTC can be utilized to prevent double taxation on the same income. Here’s how it applies:
1. U.S. taxpayers who have paid capital gains taxes in Germany can claim a foreign tax credit on their U.S. tax return for the taxes paid to the German government.
2. The FTC is generally limited to the amount of U.S. tax that would have been imposed on the same income, so the credit cannot exceed the U.S. tax liability related to the foreign-sourced capital gains.
3. Taxpayers must report the foreign income and taxes paid on Form 1116 attached to their U.S. tax return to claim the Foreign Tax Credit accurately.
By utilizing the Foreign Tax Credit, U.S. taxpayers can avoid being taxed twice on the same income, ensuring that they are not unfairly penalized for earning income in a foreign country like Germany.
17. Are there any differences in claiming the Foreign Tax Credit for U.S. citizens in Germany versus other foreign countries?
Yes, there are specific differences in claiming the Foreign Tax Credit (FTC) for U.S. citizens residing in Germany compared to other foreign countries. Here are some key distinctions:
1. Tax Treaty: The United States has a tax treaty with Germany that may impact the claiming of the FTC. The provisions of the tax treaty outline certain rules for avoiding double taxation and may affect how an individual can claim the FTC.
2. Tax Rates and Structure: The tax rates and structure in Germany differ from those in other countries. This can impact the amount of foreign tax paid and eligible for the FTC calculation.
3. Treatment of Income: The classification of income in Germany may vary from that in other countries, which can affect the eligibility of certain income for the FTC.
4. Documentation Requirements: Germany may have specific documentation requirements for claiming the FTC that differ from those in other countries. It is crucial for U.S. citizens in Germany to understand and comply with these requirements.
5. Currency Conversion: The method of currency conversion for determining the U.S. dollar equivalent of foreign taxes paid may vary between different countries, affecting the calculation of the FTC.
Overall, while the general principles of claiming the FTC apply across all foreign countries, the specific details and requirements can vary based on the country of residence and its tax laws and treaties with the United States. U.S. citizens in Germany should consult with a tax advisor or accountant familiar with both U.S. and German tax laws to ensure proper claiming of the FTC.
18. Can I claim the Foreign Tax Credit for taxes paid on passive income, such as dividends and interest, in Germany?
Yes, as a U.S. citizen, you can claim the Foreign Tax Credit (FTC) for foreign taxes paid on passive income such as dividends and interest in Germany, provided certain conditions are met:
1. Eligibility Criteria: In order to claim the FTC, the taxes paid in Germany must be considered income taxes and meet the requirements set by the Internal Revenue Service (IRS) for the FTC.
2. Double Taxation: The purpose of the FTC is to mitigate double taxation on the same income by both the U.S. and foreign country. You can claim the credit on your U.S. tax return to offset the foreign taxes paid on your German passive income.
3. Form 1116: To claim the FTC for taxes paid in Germany, you will typically need to file Form 1116 with your U.S. tax return. This form calculates the amount of foreign tax credit you can claim based on the foreign taxes paid and your U.S. tax liability.
4. Limitations: There are limitations on the amount of foreign tax credit you can claim, which are based on various factors including the type of income, total foreign taxes paid, and your U.S. tax liability. It’s important to consult with a tax professional or accountant to ensure proper calculation and compliance with IRS regulations.
In summary, yes, you can claim the Foreign Tax Credit for passive income taxes paid in Germany, subject to meeting certain requirements and limitations outlined by the IRS.
19. How does the Foreign Tax Credit impact the determination of my overall U.S. tax liability as a U.S. citizen in Germany?
As a U.S. citizen living in Germany, the Foreign Tax Credit (FTC) can play a significant role in the determination of your overall U.S. tax liability. Here’s how it impacts your tax situation:
1. Foreign Tax Credit Calculation: The FTC allows you to offset the taxes you paid to the German government on the same income that is also subject to U.S. taxation. This means that you can claim a credit on your U.S. tax return for foreign taxes paid, reducing your U.S. tax liability.
2. Avoiding Double Taxation: The primary purpose of the FTC is to prevent U.S. citizens living abroad from being taxed on the same income by both the U.S. and foreign governments. By claiming the FTC, you can avoid double taxation and ensure that you are not paying more in taxes than necessary.
3. Limitations and Carryovers: There are certain limitations on the amount of foreign taxes that can be credited against your U.S. tax liability. If your foreign tax credit exceeds the limit, you may be able to carry over the excess credit to future years. Understanding these limitations is crucial in maximizing the benefits of the FTC.
Overall, the Foreign Tax Credit is an important tool for U.S. citizens living in Germany to reduce their U.S. tax liability and ensure they are not taxed twice on the same income. It is essential to accurately calculate and claim the FTC to optimize your tax situation and comply with U.S. tax requirements while living abroad.
20. Are there any specific deadlines or requirements for claiming the Foreign Tax Credit while living in Germany as a U.S. taxpayer?
Yes, there are specific deadlines and requirements for claiming the Foreign Tax Credit (FTC) while living in Germany as a U.S. taxpayer. Here are some key points to consider:
1. Deadline for Filing: As a U.S. taxpayer living in Germany, you are generally required to file your U.S. tax return by the standard deadline of April 15th. However, if you need more time to gather the necessary information, you can request an extension until October 15th.
2. Form 1116: To claim the Foreign Tax Credit for taxes paid to Germany, you will need to file Form 1116 with your U.S. tax return. This form is used to calculate the amount of foreign taxes paid that can be credited against your U.S. tax liability.
3. Documentation: It is important to keep detailed records of the foreign taxes you paid in Germany, such as tax receipts or statements from German tax authorities. These documents will be needed to support your claim for the Foreign Tax Credit.
4. Currency Conversion: You may need to convert the foreign taxes paid in Germany from euros to U.S. dollars using the applicable exchange rate for the tax year in question.
5. Limitations: There are limitations on the amount of foreign taxes that can be claimed for the Foreign Tax Credit, so it is important to ensure that you are not exceeding the allowable limit based on your U.S. tax liability.
By adhering to these deadlines and requirements, you can properly claim the Foreign Tax Credit while living in Germany as a U.S. taxpayer and potentially reduce your overall U.S. tax liability.