Have a Tax Question? Ask a Tax Expert
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.
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 ?
"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
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.