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You must file Form 8854 annually to docHub that no distributions have been received from your eligible deferred compensation item(s) or to report the distributions you received.
Expatriation is the process of relinquishing U.S. status. It includes both U.S. Citizens, and Green Card Holders (aka Legal Permanent Resident) who meet the definition of a Long-Term Resident (LTR). The baseline perspective is that formal expatriation rules apply to: US Citizens and Lawful Permanent Residents.
The expatriation tax provisions (prior to the AJCA amendments) apply to U.S. citizens who have renounced their citizenship and long-term residents who have ended their U.S. residency for tax purposes, if one of the principal purposes of the action is the avoidance of U.S. taxes.
Once you renounce your US citizenship, you will no longer have to pay US taxes. However, the US government does charge a fee of $2,350 to relinquish citizenship. You may also need to pay an exit tax if you qualify as a covered expatriate.
In order to even be subject to the IRS covered expatriate and exit tax rules, a person must be a U.S citizen or long-term legal permanent resident. Therefore, the easiest way to avoid the long-term resident exit tax trap it is to simply avoid becoming a legal permanent resident.
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In order to even be subject to the IRS covered expatriate and exit tax rules, a person must be a U.S citizen or long-term legal permanent resident. Therefore, the easiest way to avoid the long-term resident exit tax trap it is to simply avoid becoming a legal permanent resident.
The exit tax is the last chance for the IRS to tax you before you leave the country permanently. The exit tax is calculated as if you had sold all your assets the day before you expatriated.
In order to even be subject to the IRS covered expatriate and exit tax rules, a person must be a U.S citizen or long-term legal permanent resident. Therefore, the easiest way to avoid the long-term resident exit tax trap it is to simply avoid becoming a legal permanent resident.
We cannot comprehensively cover exit tax strategies, but we can offer some examples: Consider distributing your assets to your spouse. Attempt to keep your annual net income below the threshold. Avoid staying in the US long enough to fall under the eight years out of fifteen years residency rule.
The covered expatriate rules apply to U.S. persons who were either U.S. Citizens or Legal Permanent Residents who qualify as LTR (Long-Term Residents). The IRS requires certain expats to calculate an exit tax when they exit the U.S. and file their 1040/1040NR dual-status return along with Form 8854.

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