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An exit tax? There is no such thing. Are you talking about the $2300 processing fee? You're paying for the paperwork and interviews. You're not going to be a ci
by a2tech 6y ago
An exit tax? There is no such thing. Are you talking about the $2300 processing fee? You're paying for the paperwork and interviews. You're not going to be a citizen anymore so it seems fair to require you to pay for the time and attention of the US government to process your request.
- Schiendelman 6y agoThere is, but it’s for the very wealthy.
- texasbigdata 6y agoThe prong (from the link above) is $150k average trailing yearly income. And the prong only determines if you are elligible. From there, if you are close to retirement and have your wealth in illiquid assets where a penalty for converting them to cash is steep, you are kinda fucked. From Above link: “ IRC 877A imposes a mark-to-market regime, which generally means that all property of a covered expatriate is deemed sold for its fair market value on the day before the expatriation date. Any gain arising from the deemed sale is taken into account for the tax year of the deemed sale notwithstanding any other provisions of the Code. Any loss from the deemed sale is taken into account for the tax year of the deemed sale to the extent otherwise provided in the Code, except that the wash sale rules of IRC 1091 do not apply. The amount that would otherwise be includible in gross income by reason of the deemed sale rule is reduced (but not to below zero) by $600,000, which amount is to be adjusted for inflation for calendar years after 2008 (the “exclusion amount”). For calendar year 2014, the exclusion amount is $680,000. For other years, refer to the Instructions for Form 8854.”
- zeveb 6y agoWhere, as texasbigdata notes, 'wealthy' would include almost anyone reading this forum, and almost anyone who has enough money saved to retire.
- Schiendelman 6y agoThat’s right. We are very, very wealthy, even if it often doesn’t seem like it because of local cost of living.
- aww_dang 6y ago>If the Exit Tax applies to you, then you will be treated as if you have sold all of your assets on the day before you renounce your citizenship and will be taxed on your capital gains. https://1040abroad.com/faq/renouncing-u-s-citizenship/#:~:text=you%20will%20be%20treated%20as%20if%20you%20have%20sold%20all%20of%20your%20assets%20on%20the%20day%20before%20you%20renounce%20your%20citizenship%20and%20will%20be%20taxed%20on%20your%20capital%20gains https://1040abroad.com/faq/renouncing-u-s-citizenship/#:~:te...
- unishark 6y agothere is an expatriation tax: https://www.irs.gov/individuals/international-taxpayers/expatriation-tax https://www.irs.gov/individuals/international-taxpayers/expa...
- harperlee 6y agoGoogle expatriation tax in the IRS site.
- pedrosorio 6y agohttps://www.irs.gov/individuals/international-taxpayers/expatriation-tax https://www.irs.gov/individuals/international-taxpayers/expa... Should not affect most people, but if you have unrealized capital gains over ~$700k, you will be taxed as if you sold them when renouncing citizenship.
- voisin 6y agoWhy is this ok to impose on some people but not others?
- pedrosorio 6y agoThe rules are the same for everyone. The first $700k of unrealized capital gains are tax free for anyone renouncing their citizenship.
- elindbe2 6y agohttps://www.google.com/amp/s/www.forbes.com/sites/robertwood/2017/02/27/renounce-u-s-heres-how-irs-computes-exit-tax/amp/ https://www.google.com/amp/s/www.forbes.com/sites/robertwood...
- ProAm 6y agoIt depends on your worth, to become an ex-pat can be very expensive.