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Posted by cballard@tyyni.net on September 14, 2007, 12:35 am
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> The crucial point is the 8 years. My dad hasn't yet had a
> green card for 8 years (only 6 and a half), which is why
> he's considering leaving. So if I get this right, if he
> abandons his greencard and leaves to Australia, he could
> leave an unlimited amount in his estate to me and I'd have
> to pay absolutely no tax?
>
> This seems really strange, especially since it encourages
> wealthy people to leave the country which is just silly.
I think your understanding is correct, although it'd
probably be a good idea to consult with a professional just
to make sure that there aren't any hidden details out there.
You may also want to make sure that there won't be any
future immigration issues if he'd like to continue visiting
the U.S. after giving up the green card--I know there's a
provision in the U.S. immigration law that makes it hard for
U.S. citizens who expatriate for tax reasons to get visas to
return to the U.S.; I'm not sure how that would play out for
a green card holder. I don't think that will be an issue,
but I'm not familiar enough with immigration law to be sure.
The current version of section 877 was put in place largely
to keep American billionaires from expatriating to low-tax
countries--there were a bunch of high profile cases of that
happening in the late 1980's and early 1990's. The way it
is drafted, it does encourage people like your father to
leave before their 8 years are up, which, you are right,
doesn't make a whole lot of sense, but that's the way
Congress decided to draft it.
--
Chris
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