Perry Douglas West, Esq.

We’ve all heard it, seen it or maybe even said it:   “if so-and-so wins the election,  I’m leaving the country.   Well, if you’ve said it or thought about it, and taxes matter to you, you will want to take a long, hard, sober look at the U.S. “Expatriation Tax” or “Exit Tax”.

U.S. Citizens or long term residents may abandon their U.S. Citizenship or long terms residency (“green card”) by merely renouncing their citizenship or long term residency at a U.S. Embassy or Consulate.    (no “do overs” allowed).    The effective date is the date of renunciation.

Renunciation invokes the HEART Act which imposes a “mark to market” tax on all covered expatriates which treats all expatriate property as being sold at its fair market value the day before the expatriation date, imposing an income tax on all unrealized gains.    The tax is payable in full by April 15 of the year following the date of expatriation.

For all of you crafty souls out there, and I can see your mind working, there is  ALSO an inheritance tax of 40% on the gross value of a covered gift or bequest by the donor.    The tax is on the RECIPIENT of the gift.   The details in the application of the taxes are significant as you would expect but the end description can be the same, ” expensive”.     It is worth looking into if you are considering it.

Is the decision worth it?   It’s up to you.


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