- quote -

Well, I was speaking about my present life of retirement, so
the earned income credit doesn't apply since income from
IRAs, dividents, or interest are "ordinary income". The
earned income only applies to wages......

Renouncing one's citizenship doesn't do it well, either,
since the law says that if one's net worth is over, 500K
(from memory) then it will be assumed that the procedure is
being done to avoid taxes, and one must pay to the US for 5
years after the citizenship change........

I think this was done in the late 90s to keep people like
Bill Gates and Warren Buffet from skipping out, but it
applies to everyone. There's a LOT of people who have
those amounts in their IRAs or CDs after retirement, and I
don't think IRAs can be transferred to other countries
without immediate tax consequences.....

If you would like to compare some notes, I'd be glad to
correspond with you and am very interested in what you may
have learned. Or anyone else who has actually researched
this area for that matter......

My Email is andysharpe[at]juno.com

I am presently retired in North Texas, after 10 years of
looking around in the US, Mexico, Belize, and any other
places that caught my interest. North Texas is a GOOD place
to be retired in...

Thanks for your inputs,

Andy

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Dick Adams wrote:
- quote -

That's a very good point !! However, in my exercise, I
realized that I had a LARGE number of countries to choose
from, and would never consider retiring somewhere where the
taxes were greater. Mexico, for instance, seemed a good
idea until I actually stayed there for a while.....

Personally, I feel that the US position of taxing people who
are wholly resident in other countries just because they
were borne in the US to be confiscatory..... just my
opinion...

Moderator:
Confiscatory? Maybe capricious is a better word. I have
engaged in a similar search with different paramenters. My
contraints have been English speaking so I don't sound like
a Greengo and blend in with the population. Must freeze in
the winter so the insects die. Must have a University
library so I have access to research. Must have cable
internet. Must not be a third world country. The results
have obviously been sparse.

My brother talks of moving to the Carribean. But it's too
humid for me.

Avoiding US taxes is rather easy by using the foreign
earned income exclusion. It's the only way I know where
converting capital gians to ordinary income makes sense.

Plus if you are a real risk taker you could renounce your
citizenship. But I would not advise doing so.

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Catherine G White, EA wrote:
- quote -

The people who inherit do not pay the estate tax. That is
paid by the executor of the estate and any remainder is
distributed according to the will or the state law...

Hence, the names of the inheritors never should come up and
should not be listed anywhere that the IRS would normally
encounter it. UNLESS the IRS has a reason to inquire......

So, assuming these people are NOT the executors, they could
probably just bide their time, and get their distribution in
cash in the US, and drive across the border with the
cash.... They are supposed to "declare" it, but I am sure
they could figure out how to handle this.....

In other words, if they choose to stay below the radar, they
would probably succeed, UNLESS they got chatty or started
bragging about it... or posted it on a newsgroup...

I, however, assume that they KNOW they have been breaking
the law. Due to the tax treaty, they may not actually owe
any US tax, but they were required to file and declare the
income....

Just an opinion. I am not a tax attorney, nor related to
one..... but have spent a good deal of time studying how to
legally avoid the expat tax...... without any success...
)))

Andy

==========
Moderator:
It would seem a better use of time to study how to minimize
the taxataion of the country of residence because they are
usually higher than the US tax rates and many are
confiscatory.

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Catherine G White, EA wrote:

- quote -

This a pretty common situation. I do not understand your
Oops. Canada taxes on residency, US taxes on citizenship
and/or status. These folks have filed properly with Canada.
They must file back years with US, but they may well owe no
US income taxes.

Christopher Mewhort, EA, CGA

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Don't have all the gory details, but it got me wondering....
tale told me by a client, about a former neighbor back in
Canada.

Husband and wife, US citizens but permanent residents of
Canada. Husband has consulting business and some US clients
(oops #1). They have apparently been ignoring US taxes for
years, and have just paid Canadian taxes on their entire
income (oops #2, 3, and 4, at least).

Wife may be inheriting a smallish amount of money from an
uncle in the near future. Uncle is a US resident. Now
they're worrying about suddenly being noticed by the IRS, as
uncle's full estate may be large enough to pay a small
amount of estate tax. Oops #5 through 300....

Are these folks SOL? Should they be looking to file back US
taxes - and if so, for how many years? I haven't run into
this situation before, but it might be nice to pass a few
tidbits on to these folks through my client, in case they
want to dig out _before_ they get buried.

Any experts in expat taxes looking for new clients?

Catherine
EA in Massachusetts

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