July 17, 2025
Collaborative Cross-border Tax Planning
When Mr. Lee, a foreign citizen residing in California, sold his business, he faced many cross-border tax challenges. Recognizing the complexities involved, he needs a team to partner closely with his CPA to address various aspects of his tax situation. This collaborative approach could identify key tax exposures and leverage available credits and deductions to reduce both U.S. and foreign tax liabilities.
Working collaboratively with his CPA, our team’s objective would focus on navigating the nuances of residency and foreign tax treaty considerations so he could comply with the applicable regulations, while also working to improve his tax outcomes. This collaboration can allow us to craft a comprehensive tax strategy that balances efficiency with his cashflow needs.
We believe Mr. Lee’s immediate need is to accurately assess his quarterly estimated tax payments for the current year. Collaborating with his CPA, we can project his annual income, account for the business sale, and calculate his estimated tax liabilities for Federal and California. We could provide recommendations to stay in compliance with IRS and California requirements while minimizing underpayment penalties.
In anticipation of a significant tax payment due the following April, we can map out Mr. Lee’s expected tax obligations and set aside funds for the tax payment. This proactive tax planning would be designed to ensure that Mr. Lee has sufficient liquidity to cover his taxes yet minimize any financial stress and surprise.
Beyond tax planning, Mr. Lee may also want to convert his substantial sale proceeds from foreign currency to U.S. dollars. Leveraging our market knowledge, we could explore opportunities to secure a favorable exchange rate, carefully timing the conversion with the purposes of increasing the value and minimizing costs.
Throughout the process, we would focus on maintaining open communication with Mr. Lee and his CPA. Our plan would focus on obtaining significant tax savings, efficient currency conversion, and peace of mind while knowing your finances are managed by a coordinated team of professionals.
The above illustrations are not actual client experiences; rather, they are examples of some issues clients may face and why they may seek our services. The information provided does not purport to present a complete picture, but Focus Partners believes the information is representative of issues and needs fac¬ing some clients and why they may seek this service. The fictional scenario and examples described are hypothetical in nature and are provided to demonstrate various questions clients may encounter. The scenario is not intended to predict future outcomes. Nothing contained in this presentation may be relied upon as a guarantee, promise, assurance, or representation as to the future. This should not be construed as specific investment, tax, or legal advice. Individuals should seek advice from their wealth advisor or other advisors before undertaking actions in response to the matters discussed. No client or prospective should assume the above information serves as the receipt of, or substitute for, personalized individual advice. Please be advised that Focus Partners only shares video and content through our website or other official sources. Services and investment advice are only provided pursuant to an advisory agreement with the client. Services are offered through Focus Partners Wealth, LLC (“Focus Partners”), an SEC registered investment adviser with offices throughout the country. Registration with the SEC does not imply a certain level of skill or training and does not imply that the SEC has endorsed or approved the qualifications of Focus Partners or its representatives. Prior to January 2025, Focus Partners was named The Colony Group, LLC. Focus Partners has been part of the Focus Financial Partners partnership since 2011.
