Tag Archives: Mark-to-Market Tax

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: Non-Grantor Trusts

April 05, 2013  |   Posted by :   |   Expatriation   |   0 Comments

A covered expatriate’s interest in a non-grantor trust is not subject to the “mark-to-market tax”. Instead, the taxable portion of distributions to a covered expatriate, who was a beneficiary (but not an owner) of a trust on the day before the expatriation date are subject to a 30% withholding tax. Under HEART (tax legislation), a […]

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Expatriation – Specified Tax Deferred Accounts

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

The mark-to-market tax regime does not apply to specified tax deferred accounts.  Under IRC Section 877A(e)(1)(A), if a covered expatriate holds any interest in a specified tax deferred account on the day before the expatriation date, such covered expatriate is treated as having received a distribution of his or her entire interest in such account […]

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Expatriation: Mark-to-Market Tax

December 13, 2012  |   Posted by :   |   Expatriation   |   0 Comments

Exclusion Agreement Under the “Mark-to-Market Tax”, upon expatriation, the covered expatriate is taxed on the unrealized gain in their assets, to the extent it exceeds $651,000 (for 2012) (IRC Section 877A). The IRC Section 877A exclusion amount must be allocated pro-rata across all assets having built-in gain owned by the covered expatriate on the day […]

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Expatriation: Covered Expatriate

December 10, 2012  |   Posted by :   |   Expatriation   |   0 Comments

A covered expatriate is an individual who either: 1) Relinquishes their U.S. citizenship; or 2) Terminates their long-term residency status after June 16, 2008. The act of expatriation, triggers two (2) taxes: 1)  Under IRC Section 877A, a “mark-to-market tax” is imposed on the expatriate taxing net gains on assets (in excess of $651,000 in […]

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Expatriation: Green Card Holders

December 05, 2012  |   Posted by :   |   Expatriation   |   0 Comments

The Heroes Earnings Assistance and Relief Tax Act of 2009 (“HEART”), P.L. No. 110-245, adds new IRC Sections: 877A (imposing a “mark to market tax” on asset “sale” net gains) and IRC§2801 adding a “succession tax” (on the receipt by a U.S. person of a gift from a “covered expatriate”.) Based upon these new taxes, […]

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