Taxes re Interest, Home Loan and Staking
Posted: Sun Aug 04, 2024 4:31 am
Hi all.
Recently joined and glad to be part of the forum. Seeking some input and views in the following areas.
Background for context:
I'm a Blue Tax filer in Japan and have US and Japanese citizenship. As of 1/1/2024, I'm a sole proprietor with Real Estate Income for properties in Japan.
(1) Taxes on interest earned with Foreign Currency Time-Deposits at a Japanese Financial Institution.
For interest earned and paid in the same Foreign Currency, the bank already withholds the 20.315% tax. If I were to convert the interest portion only and not the Principle to Yen, I presume then, that this would trigger a 'tax event' and would have to be reported?
If yes, and if I were to start converting my Foreign Currency Interest to Yen every month - would I use the TTM on day of exchange? I've read in other places that NTA would accept a method so long as you are consistent and/or using a 'moving average'. In this case I would have all records of FX dates so wouldn't have an issue with trying to back-track transactions and therefore no need to use a moving average and instead, the actual rates. Historically, converting back to Yen isn't something I've been regularly doing so don't have any 'baseline'.
(2) Home Loan Tax Credit.
I have a 15 year mortgage through Prestia and about 10 years left. Since getting the loan, I've not qualified to apply for the Tax credit due to the bracket I was in. Now that my situation has changed, looking forward to finally being able to take advantage of this.
I understand you would need to meet the criteria for the credit (which I believe I do) and submit paperwork by March together with your tax return. Then, the following tax year is when the credit is applied - by which point your year end mortgage balance would have reduced since first submitting the forms leading to a lower credit. Would my understanding be correct? Also, with the interest rate raise the BoJ did last week, any foreseeable changes to how Home Loan Tax credit would be treated? I know there were changes a couple years ago from 1% of loan balance over 10 years to something like 1.2% over 7 years - but since I didn't use the credit I didn't look at it in depth.
(3) Virtual Currency Staking.
Staking Rewards has started for a number of coins this year. I know these rewards are taxable both in Japan and the US. It seems a bit challenging to find the actual/acceptable rate of conversion for virtual currency to report. Does anyone have good insights on this? Does the NTA and IRS have differences in rules on the conversion? This site was interesting and they offer a reporting API that you can use to connect to your exchange that pulls tax reports. Haven't tried it at this time.
Many thanks and appreciate any feedback.
Recently joined and glad to be part of the forum. Seeking some input and views in the following areas.
Background for context:
I'm a Blue Tax filer in Japan and have US and Japanese citizenship. As of 1/1/2024, I'm a sole proprietor with Real Estate Income for properties in Japan.
(1) Taxes on interest earned with Foreign Currency Time-Deposits at a Japanese Financial Institution.
For interest earned and paid in the same Foreign Currency, the bank already withholds the 20.315% tax. If I were to convert the interest portion only and not the Principle to Yen, I presume then, that this would trigger a 'tax event' and would have to be reported?
If yes, and if I were to start converting my Foreign Currency Interest to Yen every month - would I use the TTM on day of exchange? I've read in other places that NTA would accept a method so long as you are consistent and/or using a 'moving average'. In this case I would have all records of FX dates so wouldn't have an issue with trying to back-track transactions and therefore no need to use a moving average and instead, the actual rates. Historically, converting back to Yen isn't something I've been regularly doing so don't have any 'baseline'.
(2) Home Loan Tax Credit.
I have a 15 year mortgage through Prestia and about 10 years left. Since getting the loan, I've not qualified to apply for the Tax credit due to the bracket I was in. Now that my situation has changed, looking forward to finally being able to take advantage of this.
I understand you would need to meet the criteria for the credit (which I believe I do) and submit paperwork by March together with your tax return. Then, the following tax year is when the credit is applied - by which point your year end mortgage balance would have reduced since first submitting the forms leading to a lower credit. Would my understanding be correct? Also, with the interest rate raise the BoJ did last week, any foreseeable changes to how Home Loan Tax credit would be treated? I know there were changes a couple years ago from 1% of loan balance over 10 years to something like 1.2% over 7 years - but since I didn't use the credit I didn't look at it in depth.
(3) Virtual Currency Staking.
Staking Rewards has started for a number of coins this year. I know these rewards are taxable both in Japan and the US. It seems a bit challenging to find the actual/acceptable rate of conversion for virtual currency to report. Does anyone have good insights on this? Does the NTA and IRS have differences in rules on the conversion? This site was interesting and they offer a reporting API that you can use to connect to your exchange that pulls tax reports. Haven't tried it at this time.
Many thanks and appreciate any feedback.