The event was organized by Rachel Greenwood of Eighteen 7 Events. If you need an event organized in Dubai, call Rachel.

The Conference was at The Address Dubai Mall, which is a very nice hotel indeed. But afterwards we all decamped to The Palace Hotel, which overlooks the lake by the Dubai Mall and the massive fountain there.

I had seen the fountain show before, but this was from a different–and much better–view. We were on a rooftop, with an immaculately catered dinner. And fireworks. Really, really superb fireworks. I didn’t know that the STEP chapter had enough money in the budget for fireworks, but here you have it. Never say that bankers, lawyers, and accountants don’t know how to have fun!

(Oh. The Dubai World Cup is a few days away? And there was a massive party waterside, over there, where the searchlights and lasers were blasting away? And all that music? The fireworks weren’t for us? Never mind.)

Anyway. PDFs (in all their glory) of the handout and the slides. Read ‘em and weep.

The Indonesia portion of this tip is fully committed.  I have no time availability.  I will be returning to Asia in the near future, so let me know if you would like to meet next time I am there.  Almost every trip I make to Asia will include stops in Jakarta and Singapore; other locations are added as needed.

I will have limited availability in Dubai.  I am staying at the Ritz-Carlton in the DIFC.  Email me or SMS me if you would like to meet.  My email address is:

phil

at

the domain name of this website

You will be able to reach me while I am in Dubai at 050 1729183 (from outside the country, dial +971-50-1729183), which is my mobile number there.  Or you can always use my U.S. mobile which is +1-626-999-4000.

This will be an interesting trip–it is an ‘around-the-world’ flight.  Los Angeles to Jakarta to Dubai to Los Angeles.  Jet lag, anyone?

Here is the flyer. SBT1152-STEP-Arabia-Conference-Announcement-FINAL-PRINT.pdf

Jell-O Shot Number 015 – The On The Road Again Edition

TL;DR

Headed to Dubai and Riyadh. Topics: real estate and expatriation. People vote with their feet and their wallets.

Now

After a long absence, the Jell-O Shot returns. Mostly I write this while sitting in an airport somewhere, usually jet lagged. I haven’t been on a long flight since last May. This email is your clue that travel is kicking back in gear.

I’m headed for Dubai, then Riyadh. This is a normal loop for me. The two things on the agenda for meetings?

• real estate investments; and
• expatriation.

Real Estate

For most people, the concept of nonresidents buying U.S. real estate will generate a yawn. Dog bites man. Film at 11. The market is down, the dollar is cheap. What’s not to like? (FWIW I see purchases of single family homes for personal use as well as traditional commercial/investment property purchases). My job there is to make it happen. And keep the taxes low, as much as possible at least.

People are voting with their wallets.

Expatriation

But expatriation? Yes. Our office is doing a startlingly large volume of business in helping people terminate their U.S. citizenship or green cards.

People are voting with their feet.

The process is complex — not only do you log out of the citizenship/residence system, but you also have to log out of the U.S. tax system properly. That can get expensive. The IRS behaves somewhat like a lover scorned, wanting to land one last kick in your derriere as you’re walking out the door.

When I go to the Middle East (and I go a lot) people grumble about U.S. foreign policy. But people don’t terminate their U.S. citizenship for that reason, in my experience. They cite U.S. tax policies.

Reflexively you think, aha! They don’t want to pay income tax. Well, not exactly. Our best salesman is IRS Commission Shulman and his holy war on U.S. taxpayers who have foreign bank accounts. Bluntly, it is the prospect of facing dozens of required tax forms — sometimes obscure — with monster penalties if you screw things up. This has been the pattern since 2008 when the IRS started gearing up to pursue offshore bank accounts held by U.S. persons.

Living a normal life and unintentionally subjecting yourself to gigantic (as in hundreds of thousands of dollars) penalties for a paperwork foot fault strikes most people as unfair.

The second tax reason given is the estate tax. For multinational families with assets abroad, with some family members U.S. citizens and some not, the U.S. estate tax can eviscerate the family firm, or the family real estate holdings. If the wealth was created outside the U.S. with significant non-U.S. inputs (human or capital) it strikes many as unfair to sacrifice 35% to the United States Treasury.

The U.S. passport is too expensive. What you get for what you pay is out of balance.
That’s why people give up citizenship and permanent resident status.
And the people who are doing this are precisely the people you’d want as productive, contributing members of the U.S. society.

End of rant.

LAX w00t!

I’m sitting in the barn that passes for a terminal at LAX, ready to board the bus to take me to the Emirates nonstop to Dubai. I’m looking forward to re-connecting with friends there. More later.

And you can always unsubscribe if you want. There’s a little hyperlink buried in this email that will let you do that instantly.

Phil.

(Available on +1-626-999-4000 while abroad — my T-Mobile cell phone).
As always, call/email. I’d love to hear from you.

OK Possums (sly reference to Dame Edna). Here is the PDF for people attending the 2011 Tax Update and Planning Conference sponsored by the California Society of CPAs. I’m in San Francisco today and Universal City tomorrow.

We just had our first organizing committee meeting today.  I’m looking forward to a great session again this year.

Put it in your calendar.  In person on December 8, 2011 in San Francisco.  If that’s too hard to get to, you can be there via webcast.

Sign up.  Attend and get smart.  And be sure to give the Chairman a hard time while you’re there.  :-)

If there are enough people who are interested in this topic, I will do another webcast myself — same topic.  Free for anyone.  Live session, and I’d record it for people who missed the session and want to watch it later.

Shoot me an email at phil-at-hodgen-dot-com so I can get a sense of whether there are enough people out there to make it worth setting up.  You’ll get the presentation that I normally give to accountant/lawyer/banker groups.  I promise not to swear.

Let me know what part of the world you’re in so I can guess on a good time to schedule this, too.

Did I say “free”?  :-)

I’d do it sometime in June, 2011.

My job is to amuse the group for about an hour. Topics will be:

• The U.S. exit tax–giving up citizenship or permanent resident status;
• Structuring techniques for nonresidents’ investments in U.S. real estate; and
• Grantor trusts with U.S. beneficiaries and non-U.S. settlors.

Yes, of course these are monumental topics, packed full of arcane knowledge and secret wisdom passed down from the Ancient Masters.  One can scarcely learn one of these topics adequately in a lifetime of serious study.  No problem.  We’ll get it all done in less than an hour, with plenty of question/answer time.

I’m looking forward to returning to Dubai.  I was last there in February and it was a pretty hectic trip then.  This one will be, too.

If you’re interested in meeting while I’m there (25th through 31st May), please contact me ahead of time and we’ll set something up.  I’ll be at the Ritz in the DIFC.  Last time I was in Dubai I stayed there.  On arrival, I staggered out of the taxi after the long flight from Los Angeles and was greeted by name by the gentleman at the door.  I had never stayed there before, and the hotel had only been open for about 3 weeks at that point.  I’m a fan of the Ritz for life.

TL;DR

Travel is fun. Opportunities are everywhere. I return to Blackberry-land.

NOW

I’m in Riyadh at the moment. To be precise I am enjoying a venti mocha Frappuccino at the Kingdom Centre as it is a trifle dusty outside. My next meeting is in two hours.

DUBAI

I first spent several busy days in Dubai meeting people and wrestling with jet lag. Did some business. Met Twitter friends. (Hi @pkgulati!). Hung out. Didn’t ski this time. Once was enough.

For all of the complaining (by some) or smirking (by others) about the state of Dubai’s economy, business still looks good to an outsider (that would be me). Malls full (Carrefours at the Mall of the Emirates — wow). Construction continues (apparently projects that were in the pipeline anyway but still…). The new Ritz opened in the DIFC after being mothballed for a while so that must mean something. (Nice place. Stayed there). Yeah I heard complaints about the real estate market etc. Complaints are normal. They’re all hanging in for the long haul.

I figure Dubai will continue to thrive as a regional magnet for capital and talent. I know I could live in Dubai. Don’t tell my wife and kids!

I AM NEARLY A MAYBACH OWNER

Just a quick warning. I will be winning a Maybach soon. I bought what will undoubtedly be the winning ticket in a raffle at the Dubai airport. AED 1,000 for a 1/6,500 chance at a US$1.6M car Why not?

RIYADH

Now I’m in Riyadh. Meeting some of my contacts. Making some new friends. Missed three people because I somehow scheduled my trip during the school holidays. Did my pilgrimage to La Vida Havana (a cigar club) last night to catch up with Turki (aka @Saudi on Twitter). He’s engaged and will get married in May. His mom is on him already for grandchildren. Moms are the same everywhere.

I’m staying at the Intercontinental. Let me just say that it is redolent of ’70s architecture in the best possible way. You could shoot a Roger Moore era James Bond movie in here. Fabulously archaic. And unfortunately being heavily renovated. But it has free wifi!

(The interruption in this prose came because I was kicked out of Starbucks for prayer time. Back in 25 minutes.)

OK. I’m back.

BUSINESS

Surprising: much interest in the topic of giving up US citizenship. Memo to Congress: wealth comes from people. Don’t chase them away with dumb tax policies.

Inbound opportunities to the region? They’re good. I see opportunities for U.S. companies and investments. Don’t believe what you see on the TV news. Especially what you see from the U.S. mainstream media and cable channels. Yes, things are happening in Cairo and elsewhere. But the interpretations you’re being fed on TV are almost certainly wrong. When I watch TV it’s hard to hear what’s going on because of the din of ideological axes grinding. The region is a great place to visit and do business in.

Outbound investments? I’m not seeing too much of this at the moment. There are opportunities here. There is uncertainty in the U.S., and for those of my clients who had money in hedge funds and the like, well, the experience still burns. This will change. For the moment, though, there is caution.

TRAVEL TECH

Sold the MacBook Pro. Bought a MacBook Air. The 11 inch model. Best laptop ever.

AT&T will own my soul when I return. International roaming charges — especially data — are killer with the iPhone.

So I bought a Blackberry. I’m sticking local SIMs into it. Call me in Saudi Arabia at +966-54-855-1522. Despite being a total Apple nerd I like being back on the Blackberry. Recommended for travel. @Saudi mocked me for the Blackberry. He is a bigger Apple fan than I am.

Twitter qualifies as tech. Notice anything in this Jell-O Shot about Twitter? Get on it. Make new friends. I’m just saying….

NEXT TRIP HERE

I’ll be back in the region in a couple of months. If I missed you this time, let’s get together on the next trip.

As always, call/email. I’d love to hear from you.

/Phil

M +1-626-437-2500

phil@hodgen.com

Here is one of the things I promised to post on my blog for the people who were there — the Tax Court opinions in the Suzanne J. Pierre v. Commissioner cases.

The main opinion (PDF) is from 2009  and is a full Tax Court opinion.  The supplemental opinion from 2010 is here (PDF).  The supplemental opinion is a Tax Court Memo opinion.