Have a friend in similar situation.
1. US Citizen, retired, moved to Germany since a few years ago. Staying year round.
2. All income from US bank CDs, Ponzi scheme loss recoveries (Ponzi scheme was a US company), no wage income in Germany.
3. German tax law requires all her income is taxed in Germany regardless where it is earned.
To avoid double taxation in Germany and US.
- Should they designate all income in #2 as foreign income even though they are from US entity?
- File US tax return and claim foreign tax credit deduction to eliminate US tax liability?
