Your new client asks you for some tax advice. She is a U.S. citizen and is going to open up an LTD entity in Tupohs (a Country), which does not have a tax treaty with the USA. The LTD there is not a per se corporation. She predicts that the company will lose money in the first two years of operations, but will turn significantly profitable in year four after breaking even in year three.
Your client will also have significant USA income from other sources during these years and would like to be able to offset this USA income with the losses from her business in Fredonia during the first years.
She would also like to be able to minimize the USA tax in year 4 and beyond given that the tax rate in Tupohs is lower than the USA and she expects to reinvest the earnings there (in Tupohs) into business expansion there.

1). Can you give her any advice on how she would be able to use the losses from the business in Tupohs against her other USA income? Describe in detail the steps, if any, that she would have to do.

2). What advice do you have for her for years 4 and beyond such that she can lower her USA tax liability then?