- quote -

I think your understanding is correct, although it'd
probably be a good idea to consult with a professional just
to make sure that there aren't any hidden details out there.
You may also want to make sure that there won't be any
future immigration issues if he'd like to continue visiting
the U.S. after giving up the green card--I know there's a
provision in the U.S. immigration law that makes it hard for
U.S. citizens who expatriate for tax reasons to get visas to
return to the U.S.; I'm not sure how that would play out for
a green card holder. I don't think that will be an issue,
but I'm not familiar enough with immigration law to be sure.

The current version of section 877 was put in place largely
to keep American billionaires from expatriating to low-tax
countries--there were a bunch of high profile cases of that
happening in the late 1980's and early 1990's. The way it
is drafted, it does encourage people like your father to
leave before their 8 years are up, which, you are right,
doesn't make a whole lot of sense, but that's the way
Congress decided to draft it.

--
Chris

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"cball...[at]tyyni.net" <cball...[at]tyyni.net> wrote:
- quote -

The crucial point is the 8 years. My dad hasn't yet had a
green card for 8 years (only 6 and a half), which is why
he's considering leaving. So if I get this right, if he
abandons his greencard and leaves to Australia, he could
leave an unlimited amount in his estate to me and I'd have
to pay absolutely no tax?

This seems really strange, especially since it encourages
wealthy people to leave the country which is just silly.


<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"cballard[at]tyyni.net" <cballard[at]tyyni.net> wrote:

- quote -

I knew about this but thought that it was passed only for
political show. Has this ever been prosecuted?

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

atyt...[at]gmail.com wrote:

- quote -

Generally speaking, a person who is both a non-citizen and
non- resident of the U.S. and who does not have any U.S.
property will not owe U.S. estate taxes. There is a
possible wrinkle to your proposed scenario because of the
application of Internal Revenue Code section 877. Under
that Code section, a person who expatriates from the U.S.
for tax purposes will remain subject to the U.S. estate tax
for 10 years after the date of expatriation. This section
also applies to a person who was a green card holder for at
least 8 of the 15 years immediately prior to the year in
which the person gives up a green card. The estate tax tie
in to section 877 can be found in Code section 2107.

Expatriation (or giving up a green card) is presumed to be
for tax purposes if the person's average annual net income
tax is at least $136,000 for the 5 years prior to
expatriation or if the person's net worth is more than $2
million. There is a mechanism to apply for a ruling that
the expatriation was not for tax purposes--these provisions
would not apply if a ruling were granted.

--Chris

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Hi all, my dad is a greencard holder with Australian
citizenship, but he's thinking of giving up his greencard
just before he has a chance to become a citizen of the US
because he wants to avoid paying estate taxes on his
real-estate portfolio (probably worth about 4M) in
Australia.

He thinks if he turns in his greencard and returns to
australia, he can give his estate to me (I'm a US citizen)
at the time of his death without me incurring any taxes in
the US (Australia has no death tax).

Is he correct that giving the estate of a non-resident to a
US citizen does not incur the estate tax, or any other form
of gift or inheritance tax?

Is there a better way to handle this, because I'd really
prefer my dad to become a US citizen so he can spend more
time here

Thanks!

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >