QUESTION:
Hi
Here's my situation. I am currently in us planning to leave us for good to
india.
If I am USC and once I move to India,& down
the line I decide to give up USCitizenship what are the tax implications. I
will not
be haveing any ties to US then (no money
or bank account) My total assets will be
definitely < 1 million$.
Once I give up USC how do I notify IRS ?
I hear I need to keep filing tax returns for 10yrs. Can you please explain
?
Thanks a lot for your help
=====================================
david ingram replies:
I cannot imagine your wanting to give up something that half the people in
the world and a whole bunch from India would give anything for.
In my 44 years in this business, I have only had two people give up their US
citizenship and they did it for pure political reasons that still did not
make any sense to me.
If you wish to relinquish your citizenship you have to attend at a US
government office which could be the US Embassy in India and fill out a form
and swear that you want to do it in front of a consular officer.
THEN, you can NOT go back to the US for any reason while you are alive if
you gave it up to avoid income tax. However, if you do get an exemption to
go back for business or family reasons, if you are there more than 30 days
as a visitor or more than 60 days on business trips, you become taxable on
your world income again.
You also have to pay tax on any assets you own when you leave by filing form
8854 - However, if your Federal tax was less than about $125,000 a year
indexed for the last 5 years and if your assets are less than $2,000,000 US,
there will not usually be any tax.
http://www.irs.gov/pub/irs-pdf/f8854.pdf
This also applies to those who have a green card for 8 out of the past 15
years.
In my opinion, it makes more sense to keep your US citizenship for many
reasons.
And, you will likely want to collect your US social security.
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