Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax

Background I am a Canadian National in H-1B status. My employer

Customer Question
Background: I am a Canadian...
Background: I am a Canadian National in H-1B status. My employer has commenced the green card process on my behalf (recruitment stage of an EB-2 PERM). Based on the current visa bulletin and historical trends, I will be eligible to file an I-140 and I-485 concurrently on behalf of myself and my spouse by the end of the year. 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? I will likely inherit a considerable amount of money in the next 20 years. Generally, what are the tax obligations of green card holders?




What are the implications if we are green card holders working/residing in the U.S. vs. green card holders working/residing in Canada?



Optional Information:
State/Country relating to question: California
Submitted: 6 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 34 minutes by:
6/3/2011
Tax Professional: Lev, Tax Advisor replied 6 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,132
Experience: Taxes, Immigration, Labor Relations
Verified

LEV :

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.

Customer:

Hi Again,

Customer:

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?

Ask Your Own Tax Question
Tax Professional: Lev, Tax Advisor replied 6 years ago
See for reference - http://www.irs.gov/businesses/small/international/article/0,,id=96314,00.html
You are a resident, for tax purposes, if you are a Lawful Permanent Resident of the United States at any time during the calendar year. This is known as the "green card" test. You are a Lawful Permanent Resident of the United States, at any time, if you have been given the privilege, according to the immigration laws, of residing permanently in the United States as an immigrant.

From immigration purposes - you generally will loose your a Lawful Permanent Resident status after one year of absence. However, you may be outside the US for two years if you get a re-entry permit from immigration authorities before leaving the US.

For tax purposes - if you are either a resident or a nonresident alien departing the United States, you will usually have to show that you have complied with the U.S. income tax laws before departing from the United States. You do this by obtaining a tax clearance document, commonly called a "Departure Permit" or "Sailing Permit" from the IRS.

As a resident alien and if you did not have taxable income for the prior year and do not have taxable income for the tax year up to and including the date of departure, or you are a resident alien who is leaving only temporarily, use Form 2063 to apply for a departure permit. Resident aliens who have taxable income may still use Form 2063 to apply for a departure permit if the IRS is satisfied that your departure will not hinder the collection of tax. If you are a resident alien leaving the United States with no definite plans to return for the year, you will have to complete Form 1040-C , and pay your tax liability as shown on the Form 1040-C in order to get a departure permit. In certain cases, you may furnish a bond guaranteeing payment of tax, but you must pay your tax liability when your final income tax return is due. Any tax you pay counts as a payment on your final return that you must file after the end of your tax year.
In additional - depending on your circumstances - you might be a subject of the expatriation tax provisions - see more information in this IRS article - http://www.irs.gov/businesses/small/international/article/0,,id=97245,00.html
While it is your decision to give up your Lawful Permanent Resident status - I do not think that will provide you any tax saving. Even you are required to report all your worldwide income to the IRS - because tax rates in the US are generally lower - using the foreign tax credit will likely eliminate your US tax liability.
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,132
Experience: Taxes, Immigration, Labor Relations
Verified
Lev and 87 other Tax Specialists are ready to help you
Ask your own question now
Ask Lev Your Own Question
Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,132
30,132 Satisfied Customers
Experience: Taxes, Immigration, Labor Relations

Lev is online now

A new question is answered every 9 seconds

How JustAnswer works:

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

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.WMatteson, 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.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, 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.

OrvilleHesperia, 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!!!!

AlexLos 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.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,310 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,695 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
Are you familiar with income tax laws on business and
Are you familiar with income tax laws on business and personal returns? … read more
Lev
Lev
Tax Advisor
30,132 satisfied customers
Suppose my taxable income in 220,000 this year and the tax
Suppose my taxable income in 220,000 this year and the tax rate is X up to 200K, but Y for 200and over, do I pay Y on the full 220K or just that above 200K? … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Accidentally sent IRS an unsigned copy of our 2016 form 1040
accidentally sent IRS an unsigned copy of our 2016 form 1040 and later received a form 3531 requesting a valid original signature. Should that returned signature be dated to the original submittal dat… read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
723 satisfied customers
Under current law a 100,000 taxable income pays $10,365 plus
Under current law a 100,000 taxable income pays $10,365 plus 25% of the amount exceeding $79,400 i.e. about $16,000. Under tax reform will the tax be $25,000? … read more
Lev
Lev
Tax Advisor
30,132 satisfied customers
Question for a Tax Attorny who Knows US tax Laws regarding
Question for a Tax Attorny who Knows US tax Laws regarding Foreign Companies ? My company is a Cayman Company (#1) (Foreign) owned by USA Citizens (2). Company (#1) filed IRS Form 8832 to be Taxed as … read more
taxmanrog
taxmanrog
Master\u0027s Degree
697 satisfied customers
I am receiving some income from a foreign government "social
I am receiving some income from a foreign government "social security-type" benefit program. Where should I report this income in my Tax Return? Should I report it as "Other Foreign Financial Assets"?… read more
abci168
abci168
Principal
27 satisfied customers
REGARDING THE FEDERAL TAX LAW INTHE US. IF ONE RECEIVES
REGARDING THE FEDERAL TAX LAW INTHE US. IF ONE RECEIVES ALIMONY PAYMENTS, WHAT CAN QUALIFY AS TO ***** REDUCE THE TAX ON THE ALIMONY RECEIVED ? CAN BUSINESS LOSES BE CARRIED OVER TO REDUCE THE TAX ON … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
Sell of property tax liability. Ca. Bought home 25 yrs ago
bought home 400,000 selling 2.5 mil. Invested 500,000 owe 800,000… read more
Richard
Richard
Tax Attorney
Doctoral Degree
4,310 satisfied customers
What would the federal and state tax rate percentages be for
What would the federal and state tax rate percentages be for a $7700 IRA early withdrawal in Ohio?… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,458 satisfied customers
Us citizen living and working in colombia SA earned income
us citizen living and working in colombia SA earned income and unearned how do i report the interest and dividends are these tax at he same rate or can you also exclude them like the earned income … read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
723 satisfied customers
International attorney that can help with double Taxation
International attorney that can help with double Taxation treaty between US and Germany. A US Green card holder in the year 2014 worked in Germany more than 183 days as a doctor, but less than 330 day… read more
taxmanrog
taxmanrog
Master\u0027s Degree
697 satisfied customers
I had a California registered Limited Liability Company that
Hello, I had a California registered Limited Liability Company that went out of business in 2012. The California Franchise Tax Board won … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,458 satisfied customers
My question involves immigration law and tax law. Foreigner
My question involves immigration law and tax law.Foreigner comes to USA, becomes permanent resident. Had assets from before. I was told if you bring up to 100k USD per year to the USA, IRS doesn't min… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
A Nonresident Alien just took steps towards becoming a a
A Nonresident Alien just took steps towards becoming a a U.S. Permanent Alien in June 2017. He is an airline pilot with a tax home in Hong Kong. He has a Mandatory Provident Fund established with the … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
My friend is a nonresident alien student in the US. If he
My friend is a nonresident alien student in the US. If he receives a wire transfer from his home country, am I correct that is nontaxable income, and does it matter whether the money comes from his ow… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Form 1040 line #44 what taxes--federal income tax + social
form 1040 line #44 what taxes--federal income tax + social security +medicare tax, all or just federal? … read more
Lev
Lev
Tax Advisor
30,132 satisfied customers
US State Tax Law Regarding Inheritance: I would like to find
US State Tax Law Regarding Inheritance: I would like to find out if inheritance from a parent in Georgia would be taxable for children/grandchildren living in North Carolina, Maryland, or Georgia. The… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
Regarding Form 1040NR US nonresident alien income tax
regarding Form 1040NR US nonresident alien income tax return: where do you report U.S bank interest on the form… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x