How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask jgordosea Your Own Question

jgordosea
jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3069
Experience:  I've prepared all types of taxes since 1987.
3653323
Type Your Tax Question Here...
jgordosea is online now
A new question is answered every 9 seconds

As a long term greencard holder what happens if I move back

Resolved Question:

As a long term greencard holder what happens if I move back abroad ?
Does loosing my permanent residence status due to absence in the
country make me obligated to file 8854 and make get me exposed to exit tax?
What if I stay outside the country for 8 years but keep filing
US tax returns each year , after 8 years I am no longer a "long"
term resident for tax purposes because I do not qualify for
the 8 out of 15 years rule ?
How does this work ? I am about to become a citizen because
I was told once long term GC holder there is no difference in how
you are being treated for tax purposes. So I can get deported
and still have to file US tax returns until death without being allowed
back in the country ?
Submitted: 1 year ago.
Category: Tax
Expert:  jgordosea replied 1 year ago.

Greetings,

 

Merely being out of the country will not be used to determine when you ceased to be a long term resident. See the instructions at http://www.irs.gov/instructions/i8854/ar01.html

 

"If you were a U.S. long-term resident (LTR), you terminated your lawful permanent residency on the earliest of the following dates.

1) The date you voluntarily abandoned your lawful permanent resident status by filing Department of Homeland Security Form I-407 with a U.S. consular or immigration officer, and the Department of Homeland Security determined that you had, in fact, abandoned your lawful permanent resident status.

2) The date you became subject to a final administrative order for your removal from the United States under the Immigration and Nationality Act and you actually left the United States as a result of that order.

3) If you were a dual resident of the United States and a country with which the United States has an income tax treaty, the date you commenced to be treated as a resident of that country and you determined that, for purposes of the treaty, you are a resident of the treaty country and gave notice to the Secretary of such treatment. See Regulations section(NNN) NNN-NNNNb)-7 for information on other filing requirements if you are such an individual."

 

Please note that the date of an order for your removal from the United States is one of the possible dates that you are no longer a long term resident.

 

So, no you can not be deported and required to file tax returns as the date of the order ends the long term residency. Of course, once you get citizenship these items no longer will apply.

 

Please ask if you need information or clarification.

Thank you.

Customer: replied 1 year ago.


Greetings,

 

I am trying to understand this.....

 

I am currently a 23+ year GC holder. Let`s say I want to retire in Europe

where I am a citizen and still have residency. My net worth is 2 million.

 

"Please note that the date of an order for your removal from the United States is one of the possible dates that you are no longer a long term resident"

...and than I would have to file form 8854 ?

 

 

Does it make any difference at all if I were a Us citizen or a long term

greencard holder in that scenario ?

 

 

Expert:  jgordosea replied 1 year ago.
Hello again,

"Until you file Form 8854 and notify the Department of State or the Department of Homeland Security of your expatriating act, your expatriation for immigration purposes does not relieve you of your obligation to file U.S. tax returns and report your worldwide income as a citizen or resident of the United States." from instructions linked above.

So, for income tax filing requirements there is not any substantial difference in what must be filed by an expatriate citizen or resident.

There are likely differences in what will be taxed when you reside in the foreign country since the tax treaty will determine what may still be subject to US tax. Almost all treaties tax wages and salaries only in the resident country. Most all only tax gain from real estate in the country in which the property is located.
Being a citizen of the United States will often cause more income to be subject to US income tax.

The fact that you are a citizen and resident of a foreign country would likely make the process (for income tax) simpler if you do not get citizenship in the United States. This is what is being mentioned in item 3 above for long term residency.

There is no advantage for income tax purposes of changing from a long term resident to a citizen and there may be disadvantages.

Please let me know if you need more information or clarification on this question.

If you need more specifics or have a question in regard to tax treaties (which can be found at http://www.irs.gov/Businesses/International-Businesses/United-States-Income-Tax-Treaties---A-to-Z ) please start another question.
If you wish you can indicate my name to alert others you wish me to answer any new question.

Thank you.
Customer: replied 1 year ago.

 


"There is no advantage for income tax purposes of changing from a long term resident to a citizen and there may be disadvantages. "


The advantage of becoming a citizen is that I can return to the US


no matter how long I stay abroad.


In reference to capital gains I can make a home in a foreign country


my primary residence without loosing any residency status in the US


when I am a citizen and therefore qualify for up to 500K exclusion


when filing jointly.


 


What are the disadvantages ?


The tax treaties should apply for dual citizens the same as for permanent


residents.

Expert:  jgordosea replied 1 year ago.
Hello again,

Depending on the specifics in the tax treaty it may or may not be that "The tax treaties should apply for dual citizens the same as for permanent" That is why I said that "Being a citizen of the United States will often cause more income to be subject to US income tax." Often, but not always, is my experience.

I said that: "There is no advantage for income tax purposes of changing from a long term resident to a citizen and there may be disadvantages. " You wrote back "The advantage of becoming a citizen is that I can return to the US no matter how long I stay abroad."
Indeed, there may be advantages for you other than for income tax purposes of being a US citizen. If you do not expatriate you will have a US income tax filing requirement for like.

For tax purposes, and only considering tax purposes, the disadvantage is that in some cases more income may be subject to US income tax and for tax purposes there is no advantage.

If your home in the US is not your main place where you live for two of the five years prior to the sale, there is no exclusion of gain. Being a citizen will not change the facts about where you mainly live. No advantage in that regard to be a citizen.

You will have to weigh the possible benefits other than tax with any possible tax increase under the tax treaty.

Glad I could clarify for you the answer to your question that started this thread about citizen versus resident Form 8854 and filing requirements.

If you need more specifics or have a question in regard to tax treaties (which can be found at http://www.irs.gov/Businesses/International-Businesses/United-States-Income-Tax-Treaties---A-to-Z ) please start another question.
If you wish you can indicate my name to alert others you wish me to answer any new question.

Thank you.

Customer: replied 1 year ago.


Can you give me an example where being a citizen vs. LTR has a disadvantage with higher US taxes ? As far as I know being a LTR


or Citizen is the same.


 


If I were to move abroad and have my primary residence in a house


I will later sell I would have the primary home exclusion without


risking my status in the US when I am a resident.


 


I am currently a resident of the US , Germany and Italy with German


citizenship. I will spend a lot more time in Europe in the future but


I also could see coming back to warmer in the winter months


to Florida ect....


Bottomline I spend a lot of my life in all three countries and I have


very strong ties (real estate , friends ect...) in all 3 counties.


Yhe last 23 years I always had to make sure I don`t overextend


my time outside the US because of greencard and I am tired of this.


This is the sole reason to take on US citizenship.


 


I want to make sure I am not regretting this decision from a


tax point of view.


 


 

Expert:  jgordosea replied 1 year ago.
Hello again,

You wrote "If I were to move abroad and have my primary residence in a house I will later sell I would have the primary home exclusion without risking my status in the US when I am a resident." If you move abroad and no longer have your main home in the US that US residence will not be eligible for an exclusion unless the sale is less than three years from when you move; because you must occupy that home as your main home for at least two of the five years prior to sale.
Being a resident or a citizen has no bearing on the exclusion rather it is based on ownership and occupancy as your main home. Once another home has been your main home for three years any sale of the former main home is fully taxed and no gain can be excluded for citizens or residents. This may be a consideration for when you sell as compared to when you move.

You are correct that you cannot claim the exclusion if the expatriation tax applies to you. If you have substantial gain you plan to exclude on a sale less than three years after you leave the US then that factor alone may be enough to decide not to expatriate while you still own the home.


The general rule is that nonresident aliens and foreign corporations are subject to United States income tax laws only under limited circumstances. A citizen or resident alien of the United States is subject to US tax on worldwide income.

Since the original question was in regard to expatriation of a citizen as compared to expatriation of a citizen and the filing requirements for each; I am stating that being a nonresident alien will generally result in less income being subject to tax.
That is, there may or may not be provisions in the treaty that exclude income from taxation to the citizen.

Tax treaties can modify those general rules; but this happens in different directions, so to speak, for the nonresident alien and the resident. That is, for a citizen or resident of the US all is taxable unless excluded by a specific provision whereas for a nonresident alien nothing is taxable unless included by a specific provision.
My recollection for Germany and Italy is that there is not any difference for a US resident as compared to a US citizen.

Hope this clarifies for you even though it is advisable for you to confer with a practitioner that can get all the facts of your situation to analyze how the tax treaties may affect you, depending on your immigration status.




jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3069
Experience: I've prepared all types of taxes since 1987.
jgordosea and other Tax Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
 
 
 
Chat Now With A Tax Professional
jgordosea
jgordosea
Tax Professional
3069 Satisfied Customers
I've prepared all types of taxes since 1987.