Relinquishing US citizenship - Expatriate Ask an Income

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Hello David,
Your colleague Gail, was quite helpful on this subject, but suggested I get the finer points from you.
Some background:
I am a dual US/Canada citizen. I was born in Canada, to parents who were both born in the US. I have had both citizenships my whole life.
I lived and worked in Seattle for about 13 months, back in 90-91, and also worked in Bellingham while living here in BC, for 14 months in 2001-02. I now make C$70K, and have been filing US tax returns since '91.
I have NO US holdings, other than some CISCO shares within my Canadian RSP account.
My question is: If I want to give up my US citizenship, what do I do, and what will it cost me? I've heard of something awful called "deemed disposition" which I understand to mean that if I want to surrender my US
citizenship, I am deemed to have sold ALL my assets, and I have to pay tax on that theoretical value. I've also heard that the same thing would apply if I were to give up my Canadian citizenship, and move to the US.
Can you explain/clarify this process?
Many thanks in advance.
Kind Regards,
CCCCCC
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>From your job title, you would not want to give up your US citizenship.  It would greatly curtail your ability to perform any of your duties in the USA.

And, if you are performing "any" of your duties in the US, even just ten days a year, your US tax return would properly include the earnings on a per diem basis as US source earnings which are not eligible for the earned income deduction.  Look at page one of the form 2555 filed with your US return and you will see where the form asks how many days you were in the US and how much money your earned in the US.  The money earned in the US INCLUDES money paid to your from Canada if you performed services in the US while earning the money from Canada.
You should likely make an appointment and spend some money with us to make sure that you are doing the US returns correctly.
For instance, you mention a Canadian RRSP.  Have you reported the internal earnings on teh US returns.  If not there are massive penalties which can equal more than the amount of money in the RRSP.  
Goto www.centa.com, click on Newsletters, click on 2003 and click on August to get the RRSP rules.
As for giving up your US citizenship, you are corredt about the deemed disposition and th resulting tax liabilities.  
However, you missed the more important part.  If you give up your US citizenship to avoid having to do a US tax return, you also give up your right to EVER enter the United States Again.  goto www.centa.com click on "entering the US" and read the first 7 or 8 points for this information.
Hoping this helps, I remain 
Yours truly
David Ingram of the CEN-TA REALTY  Group
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
(604) 980-0321 - Fax 913-9123 [email protected]
www.centa.com www.david-ingram.com
Disclaimer:  This question has been answered without detailed information or consultation and is to be regarded only as general comment.   Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
Be ALERT,  the world needs more "lerts"
 
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