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  1. Hi Phil,

    This article has been really helpful, especially to the person it was intended to. I didn’t realize until now how complicated the tax system is, let along its effects on renouncing citizenship. But like any others, everything comes with a price. And in this case, it’s paperwork. But just because the process is intricate doesn’t mean that the entire system is ill. I believe that all systems are the same. I do agree with calling relevant embassies to seek assistance to be sure of what move to take. I just hope he’s not a covered expatriate because the process on being one is kinda complicated.

    This has been really helpful, Phil!

  2. Phil, you said that it is not possible to receive a tax credit on the foreign country return in 2022 for tax paid to the US in 2016. Would it be possible for someone in his situation to sell the real estate in 2016 to his wife or other foreign relative, at an arms-length price, in order to be able to recognize the gain in 2016 on the foreign return and thus be able to get a tax credit on the tax paid to the US?
    Would the same problem exist if the renunciant pays US tax on paper gains on stocks in 2016 but does not actually sell them until 2022?
    I seem to recall that the primary residence exclusion applies for foreign real estate as well, so if the real estate in the above example meets the primary residence criteria, he may owe no tax on the phantom gain.

  3. @Broken Man– The State Department recently re-opened the embassy in Havana. I would imagine their waiting list is short (if they offer the “service”). I wonder who will be the first Brocker to renounce there? One could take a winter holiday from Canada and combine business with a bit of pleasure.

  4. Deal with the US tax system?

    Prediction – Later in 2016 when the Chinese RMB becomes part of the SDR, perhaps a branch of a Chinese bank will open and only deal in the local currency and RMB not the US dollar.

    It’s probable such a bank would not engage in FATCA reporting. Cracks will start to appear in the FATCA system sooner or later as people adjust and seek redress.

  5. “If he really is up to date on his US taxes, it’s a great pity not to renounce in December 2015 rather than January 2016”

    Maybe he can still relinquish in 2015! Fly to the US, present his UK passport for entry as a tourist, and get an immigration stamp in his UK passport, either permitting or denying entry to the US. Send a registered letter to the US Department of State in 2015 to report the relinquishment. The consular appointment will be in 2016 but the registered letter in 2015 will be the date of relinquishment.

    ‘Why on earth should you be double taxed because of a mentally ill US tax system?’

    Because one of the two countries on earth with this mentally ill system has nuclear bombs (the metaphorical ones being more important in this case than the literal ones), and the rest of the world’s governments pay tribute to it.

  6. If the country where the property is situated doesn’t have its property owner’s name readily available on the internet (as in many US states), when he renounces simply don’t list it.

    Does the US really have the resources to ‘manually’ check for a property that it doesn’t know even exists?

    That’s what I’d consider doing. Why on earth should you be double taxed because of a mentally ill US tax system?

  7. If he really is up to date on his US taxes, it’s a great pity not to renounce in December 2015 rather than January 2016, though perhaps it’s getting late to organize that. If he’s able to do it this year, he can wind things up with the IRS in June of 2016. In his shoes, I’d be phoning around various embassies and consulates in the region. IIRC an Isaac Brock commenter was able to renounce as a walk-in somewhere in SE Asia – might have been Vietnam.

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Tax laws change over time, and the information in this post above may be less accurate today than it was at the time of the last revision. This post is not tax advice for your specific situation. Please contact an international tax professional to get personalized advice for your situation.