Hi and welcome to Just Answer!Question: will my foreign income be taxable by the U.S. government if I become a green card holder, or does lifetime taxation of foreign assets by the U.S. government commence if I become a naturalized citizen? Green card holders are taxed the same way as US citizens - on all worldwide income.Assets are not taxable - only income that realized from these assets will be taxable.I will likely inherit a considerable amount of money in the next 20 years. Generally, what are the tax obligations of green card holders? Inheritance is not taxable income in the US and is not reported on the tax return.Also there is no inheritance tax neither on federal level nor in California.There are estate taxes applied to estates with value above $5,000,000, but if the decedent is not a US citizen, not a US resident and no part of the estate located in the US - the US estate tax law will not be applied.What are the implications if we are green card holders working/residing in the U.S. vs. green card holders working/residing in Canada?If you will be green card holders - all worldwide income is taxable regarding on your residency.If you will be living abroad - you may claim foreign earned income exclusion - $91500 for 2010.If the same income is taxed in the US and in Canada - you claim a credit for foreign tax paid - thus effectively will avoid double taxation.
Also see Publication 597, Information on the United States–Canada Income Tax Treaty - http://www.irs.gov/pub/irs-pdf/p597.pdf .Let me know if you need any help or clarification.
Can we renounce a green card? How might we lose permanent resident status? Is there a limitation on how many years you can spend outside of the US?