U.S.-France Tax Treaty May Allow a Foreign Tax Credit Against the Net Investment Income Tax (Fed. Cl.) (§901)

A tax treaty between the United States and France could provide a foreign tax credit (FTC) against the net investment income tax (NIIT) imposed under I.R.C. §1411, held the Federal Claims Court, granting in part Taxpayers’ motion for summary judgment. Taxpayers, U.S. citizens residing in France, filed U.S. tax returns and paid NIIT on their U.S. source passive income and French source passive income. Taxpayers then filed an amended return requesting a refund of the NIIT paid for their French source passive income, based on the allowance of a FTC under a U.S.-France tax treaty originally signed in 1994, prior …


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