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Advanced Tax Planning for Nonresident Aliens: Pre-Immigration Strategies

Basis Adjustment Transactions, Drop-Off Trusts, Treatment of Nonresident Investment in the U.S., Resident Alien Exit Planning

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Tuesday, October 30, 2018

Recorded event now available

or call 1-800-926-7926

This course will provide tax advisers with a practical guide to planning tools and techniques for clients who are nonresident aliens. The panel will go beyond the basics to detail intricate strategies for minimizing income tax, including basis strategies for non-U.S. situs assets, structuring “drop-off” trusts, and planning for the possibility of the nonresident alien’s return to the country of origin.


The tax reform law changed the tax landscape and created new opportunities for nonresident alien taxpayers to establish residence in the U.S. Given some of the advantages for nonresident aliens to invest and become resident aliens in the U.S., tax advisers need to understand the more complex and powerful tax planning tools for foreign taxpayers.

One of the significant issues nonresident aliens face on establishing residency is the treatment of capital gains on the sale of assets held in the U.S. or their country of origin. Generally, nonresident aliens must take as their tax basis an amount equal to the U.S. dollar value of the purchase price of the asset. A nonresident alien does not get a step-up or mark-to-market adjustment on existing assets when he becomes a resident alien. So a critical task for tax advisers to nonresident aliens planning to seek resident alien status is to increase the basis in current assets or accelerate the sale of assets to avoid U.S. income tax.

Additional planning steps may include establishing a “drop-off trust” for high net worth individuals. Structured and funded correctly, these trusts can minimize income taxes. However, failure to fund the trust adequately or follow residency rules can create a transfer tax problem, such as inclusion in the individual’s gross estate. Advisers must plan for change from a resident alien to a nonresident alien in addition to the opposite.

Listen as our experienced panel provides a practical guide to tax planning for non-aliens and using the pre-entry nonresident alien tax planning to cover the exit process if the person determines he will be returning to the country of origin.



  1. Pre-immigration planning for nonresident aliens planning on obtaining resident alien status
  2. Basis planning
    1. For current assets located outside the U.S.
    2. Marketable securities and assets which can be sold and re-purchased before establishing presence in the U.S.
    3. Transactions and strategies for low-basis assets
  3. Drop-off trusts and other strategies for high net worth nonresident aliens
  4. Strategy and treatment of investments by nonresident aliens not contemplating immigration to the U.S.


The panel will discuss these and other relevant topics:

  • Pre-immigration basis adjustment strategies for nonresident aliens planning to establish residency in the U.S.
  • Creating and funding “drop-off trusts”
  • Timing rules for establishing resident alien status
  • Treatment of U.S. investments by nonresident aliens


Brittain, Cindy
Cindy D. Brittain

Katten Muchin Rosenman

Ms. Brittain is a partner in the firm's Trusts and Estates practice, focusing on domestic and international estate...  |  Read More

Giordano-Lascari, Thomas
Thomas M. Giordano-Lascari

Karlin & Peebles

Mr. Giordano-Lascari is an accomplished income tax and transactional attorney specializing in international matters for...  |  Read More

McCormick, Patrick
Patrick J. McCormick, J.D., LL.M.

Drucker & Scaccetti

Mr. McCormick specializes in the areas of international taxation, tax compliance, and offshore reporting...  |  Read More

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