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Expatriation

We can help you cleanly exit from the US system -- we know the tax rules and have been through the process many times.

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Trusts can act as a firewall against the US tax system, but are hard to do right. We create, terminate, and fix trusts.

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August 24, 2018

File an Income Tax Return Extension to December 15, 2018

If you are an American living abroad and sweating the October 15, 2018 tax filing deadline for your 2017 income tax returns, there is a possible piece of relief. You may be able to qualify for a further extension of time for filing your tax return — to December 15, 2018.

Summary

For American taxpayers living abroad, if you want to get a filing deadline of December 15, 2018 for your 2017 Form 1040, do this:

  • On or before June 15, 2018, file Form 4868.
  • On or before June 15, 2018, pay whatever tax you have to pay for 2017, along with that Form 4868 you are filing.
... continue reading
August 14, 2018

Dual-Status: Expatriation Year Tax Returns when US Income is Zero

This week we are talking about dual-status returns. An email reader sent us this question, asking what his income tax return should look like in the year of expatriation:

I file 1040 covering income up to the date of renunciation. Do I have to file 1040NR from the date of renunciation to the end of the year if I don’t have any US source income at all for either before or after renouncing?

The expatriation year income tax return is a little more complicated than that. It is slightly difficult to figure out whether you need to file Form 1040NR or Form 1040 as your tax return.... continue reading

July 31, 2018

Treaty Elections, Long-Term Resident Status, and Expatriation

The impact of treaty elections on long-term resident status and expatriation

Over the course of two days last week, I received three questions about the interaction of treaty elections, long-term resident status, and expatriation.

It seems there exists some confusion about what happens when a lawful permanent resident makes a treaty election to be taxed as a resident of another country: Does it cause you to expatriate? Does it prevent you from becoming an expatriate?

I am not surprised this confusion exists. Depending on when the treaty election is made, it could either cause you to expatriate or prevent you from becoming an expatriate.... continue reading

July 20, 2018

Assign a Purchase Contract to an LLC and Why It Works

Nonresidents often show up and sign contracts to buy U.S. real estate in their own names. Then, before the sale is complete, they set up a holding structure. They transfer the purchase contract to the holding structure, and the purchase is complete.

Hey presto.

As I wrote a few weeks ago, transferring a purchase contract from a nonresident individual to a holding structure is a “disposition” of U.S. real estate. The result?

  • Paperwork. Until proven otherwise, the nonresident individual must file a U.S. tax return to report the “disposition” of a “U.S. real property interest”, even though self-evidently there is no capital gain.
... continue reading
July 17, 2018

Certification Test Basics

Of the three tests that an expatriate must meet to be non-covered, the certification test is the most difficult to understand. It is also the only test to which there are no exceptions – fail this test, and you are a covered expatriate.

Today’s topic will be limited to a general discussion of what it means to pass this test.

Expatriation and the three tests

Expatriation occurs when a US citizen or “long-term resident” terminates his or her citizenship or permanent residence. 1

If the expatriate meets certain thresholds for net worth and the amount of tax they have been paying over the last five years, he or she will be what is known as a covered expatriate.... continue reading

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Events

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Tax Planning Issues for U.S. Expatriation: Minimizing the Exit Tax

This webinar will provide attendees with a comprehensive look at Section 877A, as well as strategies for minimizing the impact of expatriation taxes. The panel will discuss the impact of new tax law on expatriation planning techniques, critical challenges under Section 877A and guidance on exiting the U.S.

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International Tax Lunch

December 2018 International Tax Lunch: PFIC to CFC—Understanding Filing Requirements and Overlap

In this presentation, trace the evolution of the U.S. owners’ filing requirements with respect to a foreign startup company over the years as more U.S. owners buy in and the total U.S.

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