Tax Planning Issues for U.S. Expatriation: Minimizing the IRC 877A Exit Tax

Determining Covered Expatriates, Navigating the Mark-to-Market Tax on Unrealized Gains, Reporting Elections

Recording of a 90-minute premium CLE/CPE webinar with Q&A


Conducted on Wednesday, November 18, 2020

Recorded event now available

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Program Materials

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

Description

The number of U.S. citizens expatriating from the United States has increased at an annual rate of 20 percent over the past several years. As part of Treasury's effort to eliminate tax avoidance through expatriation, Section 877A imposes various taxes on U.S. taxpayers who renounce their citizenship or a long-held green card.

Understanding the expatriation rules contained in Section 877A is critical for lawyers and tax advisers who counsel U.S. taxpayers with cross-border ties. Section 877A creates an exit tax regime for U.S. taxpayers who renounce their citizenship, have intentionally relinquished their U.S. citizenship when they become naturalized citizens of another country, or surrender a green card held for more than seven years and whose income or net worth exceeds specific thresholds. The exit tax rules also apply to expatriates who fail to certify U.S. income tax compliance for the five years preceding the year of expatriation.

The exit tax regime under Section 877A imposes an accelerated tax on unrealized capital gains and types of deferred compensation. The exit tax rules also impose harsh gift and estate taxes on U.S. heirs of those impacted by the law.

Listen as K. Eli Akhavan, Senior Counsel at Norton Rose Fulbright US, provides a comprehensive and practical guide to navigating the exit tax regime for U.S. citizens planning expatriation.

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Outline

  1. Who is a covered expatriate?
    1. The three tests
    2. The exceptions
    3. Determining net worth when trust assets are involved
  2. The taxes applicable to a CE under Section 877A
  3. The inheritance tax under Section 2801
  4. Planning techniques

Benefits

The panelist will review these and other compelling issues:

  • Who is impacted by Section 877A?
  • How to calculate the mark-to-market tax on capital gains?
  • What types of deferred compensation are subject to the exit tax?
  • The effect of the expatriation rules on U.S. gift and estate taxes
  • Strategies for avoiding or minimizing the taxes imposed under Section 877A

Faculty

Akhavan, K. Eli
K. Eli Akhavan

Senior Counsel
Norton Rose Fulbright US

Mr. Akhavan focuses his practice on domestic and international estate, asset protection and tax planning for high...  |  Read More

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