JUST ANNOUNCED! Foreign Related Tax Inflation Adjustments for Tax Year 2019

The Internal Revenue Service today announced the tax year 2019 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes. Revenue Procedure 2018-57 provides details about these annual adjustments. The tax year 2019 adjustments generally are used on tax returns filed in 2020.

For those of you with an interest in the adjustments affecting the foreign/international area, I have summarized them below, keeping the same reference number as used in the Revenue Procedure:

.37 Expatriation to Avoid Tax. For calendar year 2019, under § 877A(g)(1)(A), unless an exception under § 877A(g)(1)(B) applies, an individual is a covered expatriate if the individual’s “average annual net income tax” under § 877(a)(2)(A) for the five taxable years ending before the expatriation date is more than $168,000.

.38 Tax Responsibilities of Expatriation. For taxable years beginning in 2019, the amount that would be includible in the gross income of a covered expatriate by reason of § 877A(a)(1) is reduced (but not below zero) by $725,000.

.39 Foreign Earned Income Exclusion. For taxable years beginning in 2019, the foreign earned income exclusion amount under § 911(b)(2)(D)(i) is $105,900.

.41 Unified Credit Against Estate Tax. For an estate of any decedent dying in calendar year 2019, the basic exclusion amount is $11,400,000 for determining the amount of the unified credit against estate tax under § 2010.

.43 Annual Exclusion for Gifts.

  • For calendar year 2019, the first $15,000 of gifts to any person (other than gifts of future interests in property) are not included in the total amount of taxable gifts under § 2503 made during that year.
  • For calendar year 2019, the first $155,000 of gifts to a spouse who is not a citizen of the United States (other than gifts of future interests in property) are not included in the total amount of taxable gifts under §§ 2503 and 2523(i)(2) made during that year.

.47 Notice of Large Gifts Received from Foreign Persons. For taxable years beginning in 2019, § 6039F authorizes the Treasury Department and the Internal Revenue Service to require recipients of gifts from certain foreign persons to report these gifts if the aggregate value of gifts received in the taxable year exceeds $16,388.

.59 Revocation or Denial of Passport in Case of Certain Tax Delinquencies. For calendar year 2019, the amount of a serious delinquent tax debt under § 7345 is $52,000.

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