Taxation & Estate Planning

U.S. UNDERTAKES WHOLESALE REWRITE OF TAX EXPATRIATION RULES

By Charles Rubin

Effective this past June 17, the U.S. undertook a wholesale revision as to how it will tax its expatriates ? persons giving up their U.S. citizenship or long-term permanent residency. In lieu of the special 10 year sourcing rules that previously applied, the U.S. will subject an expatriate to immediate U.S. income tax as if the expatriate had immediately sold all of his or her assets for their fair market value. Further, any future gifts or bequests of property to a U.S. citizen or resident will be subject to U.S. transfer taxes. Of course, both of these general rules are subject to various statutory exceptions and refinements, including the general income and asset thresholds that must be met before these rules will apply to an expatriate.

To assist in the rapid digestion of the new rules by those who are interested, I have prepared the following summary of the new statutory provisions. Click on the .docstoc logo below to open the summary, or you can also get to it here.

OVERVIEW OF CHANGES TO U.S. EXPATRIATION PROVISIONS - Get more Legal Forms

Full post as published by Rubin on Tax on July 02, 2008 (boomark / email).