Filing taxes after green card - no earnings in the US

[desirees]

My parents got their green card in March 2008, and have come here thrice so far on visits. They are planning to settle down here end of 2010, when they wrap up their business in India.
So, we are reading that even though they have no earnings in the US, they would have to declare their earnings in India to the IRS. Is that true? Does everyone do that? Is there any alternative option?
Also, what if they decide to give up their green card and revert back to a 10 yr old visa? Would it mess up their chances of getting the visa?

Thanks for any answers,

D

 

[TheRealCanadian]

My parents got their green card in March 2008, and have come here thrice so far on visits. They are planning to settle down here end of 2010, when they wrap up their business in India.

I doubt they'll be able to keep it that long. You should have applied for them in early 2010.

So, we are reading that even though they have no earnings in the US, they would have to declare their earnings in India to the IRS. Is that true? Does everyone do that? Is there any alternative option?

Yes.
Yes.
No.

Also, what if they decide to give up their green card and revert back to a 10 yr old visa? Would it mess up their chances of getting the visa?

Filing an I-407 and getting a B visa might be the best option. They should probably do both at the same time.

 

[nelsona]

This is not a tax forum.

However, while they must report all world income on a 1040 (if they exceed the minimum income filing requirement), they can reduce the US tax they may owe by (a) using any of the deductions, credits and exclusions available to any US taxpayer, including, most notably, the Foreign tax credit (form 1116) and the foreign earned income exclusion (form 2555).

But, not filing a 1040 when one should, not only gets you in trouble with IRS, but for GC-holders, could jeopardize their GC.

 

[dms1]

My parents got their green card in March 2008, and have come here thrice so far on visits.

Not only must they file a US tax return, they only have just over a month to do it before getting hit with a penalty. Since 2008 was their first year as LPRs and they had that status for more than 180 days, there are a couple of ways they can handle the filing. They need to research the concept of a "dual status alien". If they don't want the grief then they should hire a CPA.

 

[mmed]

they have no earnings in the US, they would have to declare their earnings in India to the IRS. Is that true? Does everyone do that?

I think with this economic crises, the USCIS will isue many GCs to parents and others who most probably will not work in US, first to get the high fees for that and second to hunt for any possible taxes may be collected from other countries already weak economy.