Tag Archive for Exit Tax

Guidance For Expatriates: Determining Net Worth For 877A Exit Tax Purposes – IRS Notice 97-19

Guidance For Expatriates: Determining Net Worth For 877A Exit Tax Purposes - IRS Notice 97-19

We genuinely appreciate TaxConnections members for the important role they play in educating tax professionals and taxpayers on rules and regulations they surface in the IRS tax code. These treasures finds are very helpful to so many and in this case John Richardson identifies Guidance For Expatriate Under Section 877 2501 210 and
6039F known as IRS Notice 97-19. If you are an expatriate, this is an important IRS Notice for you to read.

Guidance For Expatriate Under Section 877 2501 210 and
6039F (Notice 97-19)

PURPOSE

The Health Insurance Portability and Accountability Act of 1996
(the “Act”) recently amended sections 877, 2107 and 2501 of the Internal Revenue Code (the “Code”), and added new information reporting requirements under Section 6039F. This notice provides guidance regarding certain federal tax consequences under these sections and section 7701(b)(10) for certain individuals who lose U.S. citizenship, cease to be taxed as U.S. lawful permanent residents, or are otherwise subject to tax in the manner provided by section 877.

This notice has eleven sections:
Read More

Written by | Posted in 877A Exit Taxes (IRS Notice 97-19) • Exit Tax • Expatriate

Part 14 – Understanding “Exit Taxes”

“Leaving the U.S. tax system – renounce or relinquish U.S. citizenship, What’s the difference?”

Renunciation is one form of relinquishment – It’s not the form of relinquishment, but the time of relinquishment

Tina Turner: What’s FBAR Got To Do With It?

“Washington Post, Tina Turner Formally ‘Relinquishes’ U.S. Citizenship:

This item just in via an “activity” report from the U.S. Embassy in Bern, Switzerland, headlined “Soul Legend Relinquishes U.S. Citizenship.” Read More

Written by | Posted in Canada • Exit Tax • Expatriate

Part 3 – Understanding “Exit Taxes”

“The “Exit Tax” affects “covered expatriates” – what is a “covered expatriate”?”

In a FATCAesque world, where “relinquishments” are becoming a form of “self defense”, it’s important that you understand:

Issue A – Who is affected by the Exit Tax? What is a “covered expatriate”? Only “covered expatriates” are subject to the “Exit Tax”

1. What are the sections of the Internal Revenue Code that govern the Exit Tax?

2. Who is subject to the “Exit Tax” and why? Read More

Written by | Posted in Exit Tax • IRS

Part 1 – “Facts Are Stubborn Things” – The Possible Effect of The US “Exit Tax” On Canadian Residents

Although this series originally began on “April Fools Day”, I assure that this is NOT a joke.

This post will demonstrate how the U.S. “Exit Tax” affects “middle class Canadians who  have U.S. citizenship and wish to relinquish it. You will see how the “Exit Tax” imposes punitive taxes on Canadian assets and on income earned in Canada. You will also see how some U.S. assets are (in effect) exempted from the “Exit Tax”. We will learn from the example of a “Middle Class Canadian” with an average house in Toronto, a pension plan from the University of Toronto and a low value RRSP who decides that he no longer wishes to be a U.S. citizen.

This person has lived in Canada most (or perhaps all) of his adult life. You will see that he has NO U.S. assets and Read More

Written by | Posted in Exit Tax • FATCA • FBAR

Impossible And Expensive To Be A US Tax Compliant Citizen Abroad

Exit Tax Operates To Confiscate Assets Of Those Who Moved From The U.S. Years Ago; And On Assets Acquired After Leaving The U.S. (Including Non-U.S. Pensions)

 

Introducing Tax Expert and TaxConnections Internet Tax Summit Presenter: John Richardson, Citizenship Solutions, Toronto, Canada

Are you a “Covered Expatriate”?  Learn about this term and so much more regarding FATCA, FBAR and Exit Taxes from John Richardson on September 21st.  See his short introductory video below and get your free VIP Ticket to the Internet Tax Summit. Read More

Written by | Posted in Expatriate • FATCA • FBAR • Internet Tax Summit - 2015 • TaxConnections

Renouncing US Citizenship? How The S. 877A “Exit Tax” May Apply To Your Canadian Assets – Introduction

There is much discussion of the U.S. rules which operate to impose taxation on the residents of other countries and income earned in those other countries. You will hear references to “citizenship taxation”, “FATCA Canada“, PFIC, etc. It is becoming more common for people to wish to relinquish their U.S. citizenship. The most common form of “relinquishment is renunciation”. The U.S. tax rules, found in the Internal Revenue Code, impose taxes on everything. There is even a tax on “renouncing U.S. citizenship”. I don’t mean the $2350 USD administrative fee which everybody has to pay. (Isn’t that really a tax?). I mean a tax on your assets. To be clear:

• You must pay a price to NOT be a U.S. citizen. Read More

Written by | Posted in Expatriate • FATCA • Internet Tax Summit - 2015

Expatriation – What Happens to the “Principal Residence?”

Certain individuals who give up their US citizenship or their green cards are subject to the so-called ”Exit Tax” imposed under Section 877A of the Internal Revenue Code.

Under the so-called “expatriation” tax rules, harsh tax consequences will result if the individual giving up his US citizenship or “long-term” permanent residency (generally, this is an individual who has held a green card for 8 out of the past 15 years) is a so-called “covered expatriate”. Only “covered expatriates” will suffer the onerous tax consequences.

One is a “covered expatriate” if the individual has either a net worth of US$2 million at the time of expatriation; or, if he has a certain average income tax liability over the past 5 years prior to expatriation. One is also automatically treated as a “covered expatriate” if the Read More

Written by | Posted in Expatriate

Tina Turner – By Adopting Foreign Citizenship Are You Still Subject To The United States Exit Tax?

According to an “activity” report from the U.S. Embassy in Bern, Switzerland, long-time Swiss resident Tina Turner” was in the embassy October 24 to sign her “Statement of Voluntary Relinquishment of U.S. Citizenship under Section 349 (a)(1) of the INA” — the Immigration and Naturalization Act.

She has merely ‘relinquished’ her United States citizenship rather than formally ‘renouncing’ it, by adopting citizenship of her long-time home Switzerland.

She apparently hopes to avoid the USA’s exit tax on all her worldwide property, but she will be disappointed! Read More

Written by | Posted in Europe, Middle East