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Suppose you renounce citizenship, pay your capital "gains" taxes on some stock, and then the stock goes to zero the next day (or, rather, goes below your purcha
by throwawaymaths 3y ago
Suppose you renounce citizenship, pay your capital "gains" taxes on some stock, and then the stock goes to zero the next day (or, rather, goes below your purchase price). Are you entitled to a refund?
- Retric 3y agoThat’s identical to someone selling a stock then falling to set aside capital gains and losing it all gamboling at a craps table. Whenever you have a tax obligation like this, sell the stock and set the money aside. In the case of renouncing citizenship you can sell all your stock before you leave because you’re facing the same tax liability either way. The only risk is if you do something stupid.
- throwawaymaths 3y agoWrong. That's not how capital gains works. Capital gains is assessed at the sale of the underlying instrument. In your gambling example, if your underlying instrument went to below purchase price, you would owe nothing, or better yet, it would yield s deferrable tax credit.
- Retric 3y agoYou must have misunderstood something, renouncing citizenship is a taxable event the same way selling stock is. Thus: > That’s identical to someone selling a stock then falling to set aside capital gains You might think the only way to be forced to pay capital gains is on sale, but you’re literally complaining about people being forced to pay capital gains for something else.