Everything You Need to Know: “Expatriation”- Giving up a Green Card (LTR) or US Citizenship

Curious about what it means from a US tax perspective if you give up your green card or US citizenship?  You really should know BEFORE you take the plunge and apply for that green card or obtain US citizenship.

Tax pro’s — Want to expand your client reach by advising and planning with confidence about “expatriation”?

Some of your clients are US citizens who may be thinking of giving up their citizenship. This number may be small, but many of your clients are green card holders or are considering getting green cards.  How many understand the US tax ramifications associated with getting the green card or giving it up?  How many green card holders truly understand what will happen to them if they hold the card for 8 “tax years” (that can be far less than 8 calendar years!) and then relinquish the card? How many understand that merely because the card has “expired” for immigration purposes, the mere expiration does not let them off the hook for tax purposes?  Green card holders with expired cards remain liable for paying US tax as tax residents. In addition, those “expired” years count in determining if they have held the card long enough to be subject to the “expatriation” tax regime once the card is formally relinquished or administrative action is taken.

You, as the trusted tax professional, can provide the advice and planning if you understand the rules. Help your clients understand the tax impact, help them avoid “covered expatriate” (CE) status. If the CE expatriation regime applies, it will impose an “exit tax” on a deemed sale of the client’s worldwide assets. Certain assets such as US pensions, IRAs, Coverdell’s and others are taxed in a special way; foreign pensions are blown to pieces under the regime. Additionally, a 40% transfer tax will be imposed on any US recipients of a gift or inheritance from the CE at any time in the future.

Want to become an expatriation expert?  Join my live webinar on June 16 at 10 AM EDT and earn CPE credits.  A full course description and learning objectives, as well as registration information is at the link.

Hope to see you there!

All the US tax information you need, every week –

Named by Forbes, Top 100 Must-Follow Tax Twitter Accounts @VLJeker

Named by Bloomberg, Tax Professionals to Follow on LinkedIn

Subscribe to Virginia – US Tax Talk  to receive my weekly US tax blog posts in your inbox. My blog specializes in foreign and US international tax issues.

You can access my papers on the Social Science Research Network (SSRN) at https://ssrn.com/author=2779920


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.