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Expatriation Tax Rules

An Expatriation Tax is a tax a person that renounces their citizenship. In the United States, the Expatriation Tax provisions under Section 877 and Section 877A of the Internal Revenue Code apply to United States citizens who are have been citizens of the United States for a long person of time who have ended residency in the United States for federal tax purposes. Read below where questions regarding expatriation taxes have been answered by the Experts.

If a person is named the "covered" individual; how is the Expatriation Tax Rate calculated? Is it a simple percentage applied to the value of the combined assets; if so what is the tax rate?

The Internal Revenue 877A consists of the income tax on that is gained from property held United States citizens that delete residency in the United States. Some people may feel as though property through the world has been paid sold to other individuals for a cost that this reasonable at the time that the prior owner leaves or when expatriation comes a day before. A net gain of $600,000 is not included in the taxes of expatriating individuals.

If a person has a green card for a long time and has not lived in the United States; Does the person have to pay Expatriate Taxes in case the person abandons the green car?

The Law states that: For long-term residents, per IRC 7701(b)(6), as amended, a long-term resident ceases to be a lawful permanent resident if (A) the individual’s status of having been lawfully accorded the privilege of residing permanently in the United States as an immigrant in accordance with immigration laws has been revoked or has been administratively or judicially determined to have been abandoned, or if (B) the individual (1) commences to be treated as a resident of a foreign country under the provisions of a tax treaty between the United States and the foreign country, (2) does not waive the benefits of the treaty applicable to residents of the foreign country, and (3) notifies the IRS of such treatment on Forms 8833 and 8854.

If a person is a green card holder and has purchased some investment in a foreign country; if the person decides to give up green card and move back to the United States, does the person have to pay any tax to United States Government on Capital Gain?

If a person lives in the United States or does not live here, the person will have to have proof that the person understands the tax laws that are given by the United States before leaving from there. The person will have to get a document that refers to the tax clearance. It is called a “Departure Permit” which can be received from the Internal Revenue Services.

How can a person delete tax liability in the United States if the person moved to another country? Will the person have pay American taxes if they are a dual-citizen of the United States and the Philippines?

A person must terminate their United States citizenship if income taxes are not an option. The framework that is related to references of the Section 877 of the Internal Revenue Code is for people that are citizens of the United States that want to be terminated as citizens of the United States.

There are different forms of taxes to be paid out to the United States Government. The Expatriation Tax is a type of tax that is paid by people that terminate United States citizenship for different reasons. What are the Expatriation Taxes? What are the rules of the Expatriation Taxes? Experts are here to help with concerns dealing with Expatriation Taxes.
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Recent Expatriation Tax Questions

  • I am a dual US/Australian citizen living in NZ and have been

    I am a dual US/Australian citizen living in NZ and have been left an inheritance from my Australian mother of 1000,000 dollars. My father was an American serviceman who took my mother and me to US in 1945 and returned to Australia in 1948 .We went back to America in 1958 till 1961 and then returned to Australia for good,my father dying in 1996. Sometime between 1996 and 2000 my mother went to USA for a period of 6 months we dont know why, but think it might have had something to do with a widows pension.We do not know if she had a green card.Do we owe taxes
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  • I am purchasing a house with cash but borrowing $800,000 from

    I am purchasing a house with cash but borrowing $800,000 from my parents out of the $985,000 total price. There is no lender involved it will be a cash transaction in FL. My parents live abroad and will be wiring the money from their international bank Erste Bank Romania.
    0. Should I have my parents wire the money directly to the Escrow account for the Title company ? or should I have them wire it to my US Bank account and then I wire the entire amount to the Escrow account
    1.My question is if they wire the money directly to me are there IRS tax implications given that it might be construed as a gift which it is not.
    The amount in question $800,000 I want to pay back over next 10 years as a bullet payment.

    2. The loan will obviously not be with a registered lender so will the interest expense that I will pay my parents be tax deductible. My parents live abroad in Romania and they do not pay nor file US taxes since they are EU/Romanian citizens. I am by the way a green card holder/US resident.

    3. Can my parents gift a certain amount of the loan every year to me? and if so how much. The reason I ask is because I can sell the currently house and pay back my parents but not more than $400,000 which is the current value of the house.

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    Below is what my real estate lawyer proposed with respect to structuring the loan in question with my parents. "Regarding your parents, I could prepare a Note and Mortgage in their favor. It would be up to them as to whether or not to record it, which would necessitate payment of Intangible Tax and Documentary Stamps on the Note and Mortgage. The Intangible Tax and Documentary Stamps on the Note and Mortgage would cost a combined $5.50 for every $1,000.00 that they loan to you. You should discuss this with your C.P.A., but it is my understanding that your parents could “gift” you a certain amount each year (if they are inclined to do that) by giving you a letter each year acknowledging that they have voluntarily reduced your mortgage balance each year by the amount allowed by the I.R.S that year. I do not know if that applies since they’re Romanian. Of course, whatever you pay them from the sale of your present house would be a principal balance deduction. If you put them on the title to the house too, I do believe that you will not be able to enjoy the full benefits of Florida’s Homestead Tax Exemption."

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