The Tax Planning for Expatriation from the United States by Richard S. Lehman

Tax planning is a must for all Americans who are planning to make the transition.

An “Expatriate” means any U.S. citizen who relinquishes his or her citizenship. It also includes any long term resident of the United States who ceases to be a lawful permanent resident of the United States (Green Card). This is limited to an individual who is a green cardholder for a minimum of 8 taxable years during the period of 15 taxable years that end and include the long term residents’ expatriation date.

The taxation of Americans and long term green card holders who expatriate from the United States has gone through many changes over the years.

The latest version of these changes with tax expatriating Americans on their accumulated un-taxed wealth prior to their leaving the United States, along with their earned income that has not been paid and will be paid in the future.

In addition, the United States tax laws will tax expatriating Americans at draconian rates, for Americans that die owning United States wealth and that make significant gifts after they have given up their United States citizenship.

 

Proper Expatriation involves numbers crunching and, in many cases, the cost of the exit and/or inheritance taxes now or later will be less than a lifetime of the various taxes suffered as a U.S. citizen.

In many cases, the expatriation inclined person would do well to take the plunge now rather than wait for Congress to further tinker with the rules, which history teaches is only a matter of time.

– Richard S. Lehman, United States Tax Attorney