What are some facts about tax expatriation?”
Has the passage of ObamaCare left you–like conservative talk radio host Rush Limbaugh–threatening to leave the country? Or perhaps you’re so sick of listening to Limbaugh, Glenn Beck and the Tea Partiers that you’d like to flee to a remote island without cable TV. Or maybe you’re a naturalized U.S. citizen or permanent resident who has prospered here, but would now like to move back the old country for retirement–or to start a new venture. Whatever your motives, just because you leave the United States and renounce your citizenship, don’t assume you can leave U.S. taxes (or U.S. tax forms and complexity) behind, particularly if you are well-off. If you expatriated on or after June 3, 2004, but before June 17, 2008, certain expatriation tax rules apply under Internal Revenue Code 877. If you are subject to expatriation tax, you must file a Form 1040NR (a U.S. Nonresident Alien Income Tax Return) for each year in the 10-year period following expatriation. The expatriation tax for thes
–threatening to leave the country? Or perhaps you’re so sick of listening to Limbaugh, Glenn Beck and the Tea Partiers that you’d like to flee to a remote island without cable TV. Or maybe you’re a naturalized U.S. citizen or permanent resident who has prospered here, but would now like to move back the old country for retirement–or to start a new venture. Whatever your motives, just because you leave the United States and renounce your citizenship, don’t assume you can leave U.S. taxes (or U.S. tax forms and complexity) behind, particularly if you are well-off. If you expatriated on or after June 3, 2004, but before June 17, 2008, certain expatriation tax rules apply under Internal Revenue Code 877. If you are subject to expatriation tax, you must file a Form 1040NR (a U.S. Nonresident Alien Income Tax Return) for each year in the 10-year period following expatriation. The expatriation tax for these filers applies to U.S.-source gross income and gains on a net basis. What if you pac
What if you pack your bags now? For those who expatriate after June 16, 2008, the rules are different, since Internal Revenue Code Section 877A applies instead of Section 877. You are subject to an immediate exit tax, which deems you (for tax purposes) to have sold all of your worldwide property for its fair market value the day before your departure from the U.S. It wasn’t always this way. Way back when, you could leave the U.S. permanently without worrying about taxes. The first big regulation of those leaving the country for tax purposes came in 1966; it was easily avoided if you didn’t appear to be leaving primarily for tax reasons.
