My understanding: Source jurisdiction taxes all income earned within its borders. German citizen temporarily residing in the US sells a house in US and pays taxes to US gov? residence taxes all domestic and foreign income earned by a “resident”. Germany tries to tax the guy on the US home sale because he is a german citizen? Source jurisdiction usually trumps residence jurisdiction. I’m getting mixed up on the “resident” part…should i think of the “citizenship” instead?
Resident could be where you are living. It is confusing. It could be either Germany or US depending on what the question wants. I would put Source as US and Residence as Germany.
I would think “citizenship” would be the same as residence. I would think that even if the German citizen was living in Germany and sold the house in US, it would still be taxed by the US (Source) and any German taxes would be secondary based on their foreign tax credit provision.
You can be a resident for tax purposes but not a citizen. I am a resident of the U.S. - I earn income here and pay taxes here, but I am a citizen of another country.
Residence is a tax related definition… long story short it is to define where you are “from”. Generally you are a resident of a country depends on a test of certain things… aka where your primary residence is, where your bank accounts are, drivers license etc… For the exam… generally where the money is generated is the source… and generally where the primary living location is the residence… So someone who travels to Europe 6 months a year from the US to sell textbooks… his residence is US and his source income is half in Europe.