Archive | Expatriation

Expatriation and Taxation

September 30, 2016  |   Posted by :   |   Expatriation   |   0 Comments

Taxation of US Citizens has varied over the years, with terms shifting periodically from one methodology to another, but it remains today that expatriates face substantial taxation on assets at point of departure and upon renouncing citizenship. For US citizens considering such a move, they need to be mindful of not only the tax but […]

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Swiss Banks React to FATCA, Tell Americans to Close Accounts

December 27, 2013  |   Posted by :   |   Expatriation,International Tax Planning,Tax Evasion,Unreported Income   |   0 Comments

U.S. expatriates who have Swiss bank accounts are being advised to move their accounts, which effects an estimated 7 million US expatriates. The Swiss banks are either selling off the US taxpayer accounts at a loss, of if at a gain (or from a pension fund) subject to 2013 U.S. income taxes. U.S. taxpayers who […]

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Expatriation – U.S. Income Tax Filing and Reporting

May 01, 2013  |   Posted by :   |   Expatriation   |   0 Comments

Under IRC Sec. 6039G, Tax Act 2008, the ensuing IRS Notice 2009-85 (IRS Notice 2009-85) expands the U.S. tax filing and reporting that is due from covered expatriates in years following the year of expatriation. Prior to the 2008 Tax Act, (“HEART Act”), a covered expatriate was required to file annual information returns on Form […]

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Expatriation – Charitable Lead Trusts

April 11, 2013  |   Posted by :   |   Expatriation   |   0 Comments

Regarding U.S. persons who expatriate, classified as “Covered Expatriates”, if prior to expatriation they establish and fund a Charitable Lead Trust, open trust distribution, they (or their heirs) may be subjected to three separate taxes under the 2008 Tax Act (“HEART ACT”): Non-Grantor Trust (30%-Withholding Tax) (1) If the trust is a non-grantor trust, the […]

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Expatriation – U.S. Estate Tax

April 10, 2013  |   Posted by :   |   Expatriation   |   0 Comments

Under IRC Sec. 2107(a), if a U.S. citizen terminates U.S. citizenship primarily for tax avoidance purposes, the application of the U.S. estate tax is more expansive to the estates of these individuals than for non-resident aliens.  Absent the applicability of these special estate tax rules, the estate of a non-resident alien (i.e. a former U.S. […]

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Expatriation – Lack of Tax Avoidance Purpose

April 09, 2013  |   Posted by :   |   Expatriation   |   0 Comments

For expatriates who leave the U.S. prior to the 2004 Tax Act (from 2004 on), they are under the 10 year alternative tax regime (i.e., they are taxed on U.S. source income through 2014). U.S. tax avoidance is not restricted to the avoidance of a specifically designated tax. For example, the tax expatriation provision included […]

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Expatriation – U.S. Gift Tax

April 09, 2013  |   Posted by :   |   Expatriation   |   0 Comments

Under IRC Sec. 2501(a)(3)(B) gift tax exemptions are eliminated for U.S. citizens who lose their citizenship within 10 years of a gift of U.S. property if the loss of citizenship had as one of its principal purposes the avoidance of U.S. gift, estate or income taxes. The following property is deemed located in the U.S. […]

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Expatriation – Tax Reporting – Form W-8CE

April 08, 2013  |   Posted by :   |   Expatriation   |   0 Comments

IRS Notice 2009-85, confirms that a covered expatriate who has: 1. A deferred compensation item; 2. A specific tax-deferred account; 3. A beneficial interest in a non-grantor trust, must file IRS Form W-8CE with the relevant payor on or before the earlier of: the day prior to the first distribution on or after the individual’s […]

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Expatriation – Tax Reporting Form 8854

April 08, 2013  |   Posted by :   |   Expatriation   |   0 Comments

A covered expatriate must file an information return on IRS Form 8854 in each tax year he is subject to the mark-to-market tax. (IRC Section 6039G; IRS Notice 2009-85). IRS Form 8854 is used to provide notice that the individual has relinquished their U.S. citizenship or long-term residency status. Form 8854 is filed in addition […]

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Expatriation – Foreign Tax Credits

April 06, 2013  |   Posted by :   |   Expatriation   |   0 Comments

An expatriate’s income, subsequent to expatriation, is not likely to be U.S. source income and will be taxed by the expatriate’s country of residence upon receipt. The expatriate may only receive a foreign tax credit, applied against any U.S. tax due on the income, if the income is foreign income and not U.S. source income […]

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