Exit Tax

Old Aug 1st 2019, 11:26 am
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Question Exit Tax

Hi i have a quick question about Exit Tax. Im about to move back to the UK (British Citizen). Ive held a green card for 5 years, i gained it in 2014. Ive always filed a tax return to the IRS for the last 4 years and i will be sending my last one next year as i plan to renounce my green card in the next couple of months.

Am i right in thinking once i renounce my green card, i will file my final tax return and not need to file or pay an exit tax as ive only had my green card for 5 years so im not classed as a long term resident?

Any help on this would be great
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Old Aug 1st 2019, 12:08 pm
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Default Re: Exit Tax

Abandonment of a green card only triggers expatriation tax if the green card has been held long-term. However, under proposed PFIC Regulations abandonment might trigger deemed disposition of any PFICs that are held.
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Old Aug 1st 2019, 4:39 pm
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Default Re: Exit Tax

Curious as to what is considered long term? Five years seems like a long time to live in another country. Short term to me would be anything less than 24 months.
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Old Aug 1st 2019, 5:15 pm
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Default Re: Exit Tax

Originally Posted by Rete View Post
Curious as to what is considered long term? Five years seems like a long time to live in another country. Short term to me would be anything less than 24 months.
A long-term resident is someone who: "is a lawful permanent resident of the United States in at least 8 taxable years during the period of 15 taxable years ending with the taxable year during which the [expatriating] occurs."

https://hodgen.com/easy-math-for-det...sident-status/

For a green card holder, any one day in a year constitutes a full year, so theoretically, someone with 1 day in year 1 (Dec. 31), plus 6 years (years 2 to 7), plus 1 day in year 8 (Jan. 1) meets the definition of a lawful permanent resident for IRS long-term resident purposes.

Nothing to do with the OP, but for others who may be long term residents considering leaving the US, in July 2019, the IRS released the following announcement concerning a new campaign it is initiating:

"U.S. citizens and long-term residents (lawful permanent residents in eight out of the last 15 taxable years) who expatriated on or after June 17, 2008, may not have met their filing requirements or tax obligations. The Internal Revenue Service will address noncompliance through a variety of treatment streams, including outreach, soft letters, and examination."
[bold mine]

https://www.irs.gov/businesses/corpo...s#expatriation

Last edited by theOAP; Aug 1st 2019 at 5:22 pm.
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Old Aug 4th 2019, 5:48 pm
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Default Re: Exit Tax

Originally Posted by danilpeam View Post
Abandonment of a green card only triggers expatriation tax if the green card has been held long-term. However, under proposed PFIC Regulations abandonment might trigger deemed disposition of any PFICs that are held.
Repetition of someone else's post 2??
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