Tax consequences of becoming a US citizen.
What are the tax implications of a US resident green card holder, with substantial assets both in his original nation and in the US, of becoming a US citizen?
On Tue, Jul 09, at 11:52AM, An Metet wrote: | What are the tax implications of a US resident green card holder, with substantial assets both in his original nation and in the US, of becoming a US citizen? Well, think positive because you're already screwed. If you have a greencard, you're tax implications are the same (or have been for me thus far) as a US citizen. if you have a green card, you can either give it up (for the loss of legal tax juridsdiction of the IRS over you) or get a US citizenship since you're already in their jurisdiction anyway.
On Tuesday, July 9, 2002, at 01:19 PM, Gabriel Rocha wrote:
On Tue, Jul 09, at 11:52AM, An Metet wrote: | What are the tax implications of a US resident green card holder, with substantial assets both in his original nation and in the US, of becoming a US citizen?
Well, think positive because you're already screwed. If you have a greencard, you're tax implications are the same (or have been for me thus far) as a US citizen. if you have a green card, you can either give it up (for the loss of legal tax juridsdiction of the IRS over you)
Why do you think a person without a green card is exempt from IRS jurisdiction? Unless one's stay is a short one (see below), income or other money earned while in the U.S. (and maybe earned outside the U.S. if the IRS can make a nexus case) is taxable. Illegal aliens are supposed to file tax returns...and they certainly don't have green cards! Here's what Uncle Sam says: "You will be considered a U.S. resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States on at least: 1. 31 days during the current year, and 2. 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting: * All the days you were present in the current year, and * 1/3 of the days you were present in the first year before the current year, and * 1/6 of the days you were present in the second year before the current year. --end IRS quote-- There are some exemptions, for student visa persons and athletes competing in games, but basically the idea is that you owe tax on money earned in the U.S., regardless of citizenship, green card, or other status.
or get a US citizenship since you're already in their jurisdiction anyway.
I think this is terrible advice. Becoming a U.S. citizen exposes a person to not only the _current year_ tax scheme but also the "for ten years after you leave the U.S." tax scheme. (Yes, any U.S. citizen who moves anywhere in the world must, technically, file U.S. tax returns for 10 years after leaving. And pay various kinds of taxes, though the amount may be different from what he would have paid had he remained in the U.S.) Also, a person having extensive offshore (outside the U.S.) assets may well find his assets are now taxable in the U.S. And for those with capital assets not taxed in their home countries (e.g., Germany, Japan), this may be quite a shock. A U.S. passport buys almost no protection. The U.S. will not defend its citizens, only its imperialist interests. --Tim May "That government is best which governs not at all." --Henry David Thoreau
On Tue, 9 Jul 2002, Tim May wrote:
Why do you think a person without a green card is exempt from IRS jurisdiction?
I assumed that he meant a US non-resident. Obvi
Unless one's stay is a short one (see below), income or other money earned while in the U.S. (and maybe earned outside the U.S. if the IRS can make a nexus case) is taxable. Illegal aliens are supposed to file tax returns...and they certainly don't have green cards!
Here's what Uncle Sam says:
"You will be considered a U.S. resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States on at least:
1. 31 days during the current year, and 2. 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting: * All the days you were present in the current year, and * 1/3 of the days you were present in the first year before the current year, and * 1/6 of the days you were present in the second year before the current year.
--end IRS quote--
There are some exemptions, for student visa persons and athletes competing in games, but basically the idea is that you owe tax on money earned in the U.S., regardless of citizenship, green card, or other status.
or get a US citizenship since you're already in their jurisdiction anyway.
I think this is terrible advice. Becoming a U.S. citizen exposes a person to not only the _current year_ tax scheme but also the "for ten years after you leave the U.S." tax scheme. (Yes, any U.S. citizen who moves anywhere in the world must, technically, file U.S. tax returns for 10 years after leaving. And pay various kinds of taxes, though the amount may be different from what he would have paid had he remained in the U.S.)
Also, a person having extensive offshore (outside the U.S.) assets may well find his assets are now taxable in the U.S. And for those with capital assets not taxed in their home countries (e.g., Germany, Japan), this may be quite a shock.
A U.S. passport buys almost no protection. The U.S. will not defend its citizens, only its imperialist interests.
--Tim May "That government is best which governs not at all." --Henry David Thoreau
On Tue, Jul 09, at 02:02PM, Tim May wrote: | Why do you think a person without a green card is exempt from IRS | jurisdiction? I should have been clearer. I was speaking for his specific case, but as it was pointed out, it applies to people who don't come here to work. | Unless one's stay is a short one (see below), income or other money | earned while in the U.S. (and maybe earned outside the U.S. if the IRS | can make a nexus case) is taxable. Illegal aliens are supposed to file | tax returns...and they certainly don't have green cards! Nor do they have Social Security numbers, or worker's rights, but that's another issue. | There are some exemptions, for student visa persons and athletes | competing in games, but basically the idea is that you owe tax on money | earned in the U.S., regardless of citizenship, green card, or other | status. The US is one of the few countries that I know of (or about) that do not allow people ona student permit to work. | I think this is terrible advice. Becoming a U.S. citizen exposes a | person to not only the _current year_ tax scheme but also the "for ten | years after you leave the U.S." tax scheme. (Yes, any U.S. citizen who | moves anywhere in the world must, technically, file U.S. tax returns for | 10 years after leaving. And pay various kinds of taxes, though the | amount may be different from what he would have paid had he remained in | the U.S.) Well, going back to his specific case. His options are slim. He already holds a green card, that makes him a US citizen as far as tax laws are concerned. (note that you cannot legally keep a green card and not meet the tax residency requirements) | Also, a person having extensive offshore (outside the U.S.) assets may | well find his assets are now taxable in the U.S. And for those with | capital assets not taxed in their home countries (e.g., Germany, Japan), | this may be quite a shock. This applies wether he is a US citizen or not, green card holder or not, Sealand citizen or not. Once the IRS sinkstheir claws into you, you're screwed. Even if you give up your green card, you are still subject to them for awhile. (A friend in Switzerland had a great deal of fun after giving up his green card and still being contacted by the IRS) | A U.S. passport buys almost no protection. The U.S. will not defend its | citizens, only its imperialist interests. More so now than ever, I do have a tendency to agree with you. But, as someone whose passport is not the pretty blue book that yours is, I disagree. "Protection" is a relative term, show up in Russia and you're kinda screwed one way or another, but show up in Genneva, Switzerland and get stopped by the police, (or any other first world country) and start speaking something other than English (or the local language) and you will have a hard time. Specially in Europe, they have massive profiling of foreigners and even if US Citizens may get a hard time just fr being American, by far and alot, that blue passport will most certainly get you out of a jam or keep you from being thrust into it. Like it or not, the US passport is well respected throughout the world ("respect" also being very relative.) I have had a few occasions where I would have been very screwed as a Brazillian, but got off well because people thought I was American. It matters, even if the .gov won't come to your rescue lance ablaze sitting on a white horse.
On Tuesday, July 9, 2002, at 03:40 PM, Gabriel Rocha wrote:
The US is one of the few countries that I know of (or about) that do not allow people ona student permit to work.
Mexico does not allow _any_ noncitizen to work! Except for folks of either a) substantial resources, b) connected with a U.S. employer. But try visiting a Mexican city and applying for a job at a restaurant, bookstore, whatever. This was a plot element in "The Treasure of the Sierra Madre," more than 50 years ago, and it remains true today. It is also difficult for non-citizens to work in many European nations. It's always hilarious for me to watch Mexicans screaming "Dat be racist! " (whoops, wrong language, but same idea) about how the tens of millions of illegal Mexicans who were given permanent residency under Simpson-Mozzoli were not enough, that the _new_ flood of Mexicans and Salvadorans and Guatemalans and..... should be given "amnesty." Meanwhile, like I said, see how long you live as an illegal alien in Mexico or Nicaragua, and see if they will issue a work permit. The U.S. is fucked up, to be sure, but talking about other countries making it easier for foreigners to work is mostly nonsense. --Tim May --Tim May "The great object is that every man be armed and everyone who is able may have a gun." --Patrick Henry "The best we can hope for concerning the people at large is that they be properly armed." --Alexander Hamilton
On Tue, Jul 09, at 05:11PM, Tim May wrote: | Mexico does not allow _any_ noncitizen to work! Two point. I did not know that about Mexico (I did say it was made about the countries I knew about.) Switzerland and Brasil both allow student visa holders to work, albeit with restrictions. Likewise for other EU nations. | Except for folks of either a) substantial resources, b) connected with a | U.S. employer. But try visiting a Mexican city and applying for a job at | a restaurant, bookstore, whatever. This was a plot element in "The | Treasure of the Sierra Madre," more than 50 years ago, and it remains | true today. It is also difficult for non-citizens to work in many | European nations. I would imagine that people with or without a work permit would be able to find work at some mexican restaurants. That is the case the world over, I don't see why Mexico would be different here. | Meanwhile, like I said, see how long you live as an illegal alien in | Mexico or Nicaragua, and see if they will issue a work permit. I wholeheartedly agree with you, but then again, not too many countries have an economy that has as large a population of illegal workers as ours. | The U.S. is fucked up, to be sure, but talking about other countries | making it easier for foreigners to work is mostly nonsense. It may well be nonsense. But my opinions are expressed as based on my personal experience in other countries and this one.
years after you leave the U.S." tax scheme. (Yes, any U.S. citizen who moves anywhere in the world must, technically, file U.S. tax returns for 10 years after leaving. And pay various kinds of taxes, though the amount may be different from what he would have paid had he remained in the U.S.)
Where did you find the 10 year limit information? AFAIK, US expatriates are subject to US taxes on their worldwide income as long as they remain US citizens, tax treaties and other exemptions notwithstanding. -- greg@cypher.net // RSA Key: 0x1606F91D // DSS Key: 0x83BB5BE4 "When liberty is taken away by force it can be restored by force. When it is relinquished voluntarily by default it can never be recovered." -- Dorothy Thompson
On Tuesday, July 9, 2002, at 06:40 PM, Greg Vassie wrote:
years after you leave the U.S." tax scheme. (Yes, any U.S. citizen who moves anywhere in the world must, technically, file U.S. tax returns for 10 years after leaving. And pay various kinds of taxes, though the amount may be different from what he would have paid had he remained in the U.S.)
Where did you find the 10 year limit information? AFAIK, US expatriates are subject to US taxes on their worldwide income as long as they remain US citizens, tax treaties and other exemptions notwithstanding.
You are incorrect. Renouncing citizenship does not relieve most people who need relief from the burden. http://www.hcfa.gov/medicare/mip/full-kk.htm "Health Insurance Portability Act of 1996" Google is your friend. --Tim May "Ben Franklin warned us that those who would trade liberty for a little bit of temporary security deserve neither. This is the path we are now racing down, with American flags fluttering."-- Tim May, on events following 9/11/2001
years after you leave the U.S." tax scheme. (Yes, any U.S. citizen who moves anywhere in the world must, technically, file U.S. tax returns for 10 years after leaving. And pay various kinds of taxes, though the amount may be different from what he would have paid had he remained in the U.S.)
Where did you find the 10 year limit information? AFAIK, US expatriates are subject to US taxes on their worldwide income as long as they remain US citizens, tax treaties and other exemptions notwithstanding.
You are incorrect. Renouncing citizenship does not relieve most people who need relief from the burden.
I think we're talking about two different things here. What I meant to say is every piece of information I've been able to find states that US citizens residing outside the US have to file tax returns and are subject to US tax laws for the rest of their lives. Whereas you stated that US citizens residing outside the US only have to file tax returns for 10 years after leaving the US, and I haven't seen that anywhere, despite extensive research on the issue since I'm a US citizen residing outside the US. My choice of the word 'expatriate' in my previous post was incorrect and for that I apologize. -- greg@cypher.net // RSA Key: 0x1606F91D // DSS Key: 0x83BB5BE4 "When liberty is taken away by force it can be restored by force. When it is relinquished voluntarily by default it can never be recovered." -- Dorothy Thompson
Basically, none. A US resident is taxed just like a citizen. In fact, even if you are not a green card holder, but have a "substantial presence" in the US, you are still taxed like a citizen. Marc de Piolenc An Metet wrote:
What are the tax implications of a US resident green card holder, with substantial assets both in his original nation and in the US, of becoming a US citizen?
-- Remember September 11, 2001 but don't forget July 4, 1776 They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety. - Benjamin Franklin
At 11:52 AM 7/9/2002 -0400, An Metet wrote:
What are the tax implications of a US resident green card holder, with substantial assets both in his original nation and in the US, of becoming a US citizen?
Take a look at <http://www.thetaxguy.com/faq.htm>. Non-US citizens may be classified as residents, nonresidents, or as dual status aliens; they also frequently can choose whether they would prefer to file as residents or nonresidents; this is an area where professional assistance is very helpful. Subsequent replies to this question have, in an unproductive fashion, confused US citizens living outside the US and former citizens living outside the US; the 10-year rule applies to people who have given up their US citizenship. People who remain citizens while living elsewhere are subject to US tax on their worldwide income (but, some income is excluded, and some income which is taxed by other jurisdictions won't be taxed again by the US) for as long as they're alive. -- Greg Broiles -- gbroiles@parrhesia.com -- PGP 0x26E4488c or 0x94245961
participants (7)
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An Metet -
Duncan Frissell -
F. Marc de Piolenc -
Gabriel Rocha -
Greg Broiles -
Greg Vassie -
Tim May