4 ms·

> The US is the only country in the world that taxes its citizens and green card holders for life after they leave. Yes on citizens, but not true about green c

> The US is the only country in the world that taxes its citizens and green card holders for life after they leave. Yes on citizens, but not true about green card holders.

jmyeet 3y ago
It's a bit more complicated. All US citizens and lawful permanent residents ("LPRs" or green card holders) must file annual taxes with the IRS regardless of where you live. Residency can be abandoned relatively easily, at which point you're not under the obligation anymore... mostly. If you stay out of the country too long, the US may decide you've abandoned your residency whether you intended to or not. An absence of 2+ years is effectively abandonment in almost all cases. Citizens can renounce their citizenship through a formal process that costs thousands of dollars. As part of this, all their assets will be taxed at current market value so if you bought a house for $300k and it's now valued at $800k even though you still own it, you'll be taxed on a capital gain of $500k. I said "mostly" because if you've been an LPR for 8+ years, you are subjected to the same mark-to-market tax that people renouncing citizenship have to pay. That's why at a certain point you may as well naturalize because you have all the negatives of citizenship and none of the positives.
- filoleg 3y ago
  I stand partially corrected on green card, thanks for pointing out the details. One question I had after reading this, what’s the significance of the 8+ years when it comes to LPR? Like, afaik the only difference I am aware of is that being roughly 4-5 years into LPR you are usually able to apply for citizenship (exceptions apply, e.g., you can apply a bit sooner if you did it through a marriage visa or did the expedited process through the US military service). Fully agreed with you on everything you said about citizenship and how sticky its tax obligations are.
  - jmyeet 3y ago
    More details about the Green Card Exit Tax [1]. > exceptions apply There are multiple conditions required for naturalization. What you're referring to is the continuous residency portion. Continuous residency is defined as the period prior to application an unbroken US residence. What constitutes a break? An absence from the US of longer than 6 months with very few exceptions (eg working for the US government or military is I believe about the only exception). Generally yes, 5 years of continuous residency is required. Marriage to a US citizen is the most common exception: 3 years of continuous residency (and being married to the US citizen for 3+ years). There is another though: 1 year of service in the US armed services also will qualify the continuous residency requirement for citizenship by naturalization. If you do have a gap in continuous resiency, a new rule kicks in. IIRC instead of 5 years of continuous residency, you qualify 4 years and 1 day after your return to the US (assuming no 6+ month gap in that time). [1]: https://www.expatriationattorneys.com/green-card-u-s-exit-tax-8-years/ https://www.expatriationattorneys.com/green-card-u-s-exit-ta...

> The US is the only country in the world that taxes its citizens and green card holders for life after they leave. Yes on citizens, but not true about green card holders.

jmyeet 3y ago

It's a bit more complicated. All US citizens and lawful permanent residents ("LPRs" or green card holders) must file annual taxes with the IRS regardless of where you live. Residency can be abandoned relatively easily, at which point you're not under the obligation anymore... mostly. If you stay out of the country too long, the US may decide you've abandoned your residency whether you intended to or not. An absence of 2+ years is effectively abandonment in almost all cases. Citizens can renounce their citizenship through a formal process that costs thousands of dollars. As part of this, all their assets will be taxed at current market value so if you bought a house for $300k and it's now valued at $800k even though you still own it, you'll be taxed on a capital gain of $500k. I said "mostly" because if you've been an LPR for 8+ years, you are subjected to the same mark-to-market tax that people renouncing citizenship have to pay. That's why at a certain point you may as well naturalize because you have all the negatives of citizenship and none of the positives.

filoleg 3y ago
I stand partially corrected on green card, thanks for pointing out the details. One question I had after reading this, what’s the significance of the 8+ years when it comes to LPR? Like, afaik the only difference I am aware of is that being roughly 4-5 years into LPR you are usually able to apply for citizenship (exceptions apply, e.g., you can apply a bit sooner if you did it through a marriage visa or did the expedited process through the US military service). Fully agreed with you on everything you said about citizenship and how sticky its tax obligations are.
- jmyeet 3y ago
  More details about the Green Card Exit Tax [1]. > exceptions apply There are multiple conditions required for naturalization. What you're referring to is the continuous residency portion. Continuous residency is defined as the period prior to application an unbroken US residence. What constitutes a break? An absence from the US of longer than 6 months with very few exceptions (eg working for the US government or military is I believe about the only exception). Generally yes, 5 years of continuous residency is required. Marriage to a US citizen is the most common exception: 3 years of continuous residency (and being married to the US citizen for 3+ years). There is another though: 1 year of service in the US armed services also will qualify the continuous residency requirement for citizenship by naturalization. If you do have a gap in continuous resiency, a new rule kicks in. IIRC instead of 5 years of continuous residency, you qualify 4 years and 1 day after your return to the US (assuming no 6+ month gap in that time). [1]: https://www.expatriationattorneys.com/green-card-u-s-exit-tax-8-years/ https://www.expatriationattorneys.com/green-card-u-s-exit-ta...