abandoning green card and dual status alien

Posted by HudRiv on October 10, 2009, 8:36 pm

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If I abandon my green card, will I be a dual status alien for that
year's tax return? I live in my own country for two years and it is my
tax home.

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Posted by removeps-groups@yahoo.com on October 11, 2009, 1:41 pm

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> If I abandon my green card, will I be a dual status alien for that

> year's tax return? I live in my own country for two years and it is my

> tax home.

Yes, you would be a dual status alien. However, it looks like your
entire worldwide income is taxable. Sounds a bit strange, but see the
quote from chapter 6 below. Someone should verify my claims.

It might be good to talk to a pro to cover all your bases from filing
with the Secretary of State and the IRS.

See publication 519:

http://www.irs.gov/publications/p519/ch01.html#en_US_publink100038966

Dual-Status Aliens

You can be both a nonresident alien and a resident alien during the
same tax year. This usually occurs in the year you arrive in or depart
from the United States. Aliens who have dual status should see chapter
6 for information on filing a return for a dual-status tax year.

http://www.irs.gov/publications/p519/ch01.html#en_US_publink100038983

Last Year of Residency

If you were a U.S. resident in 2008 but are not a U.S. resident during
any part of 2009, you cease to be a U.S. resident on your residency
termination date. Your residency termination date is December 31,
2008, unless you qualify for an earlier date as discussed next.
Earlier residency termination date. You may qualify for a residency
termination date that is earlier than December 31. This date is:

1.

The last day in 2008 that you are physically present in the
United States, if you met the substantial presence test,
2.

The first day in 2008 that you are no longer a lawful permanent
resident of the United States, if you met the green card test, or
3.

The later of (1) or (2), if you met both tests.

>From chapter 6

http://www.irs.gov/publications/p519/ch06.html#en_US_publink100039260

Income Subject to Tax

For the part of the year you are a resident alien, you are taxed on
income from all sources. Income from sources outside the United States
is taxable if you receive it while you are a resident alien. The
income is taxable even if you earned it while you were a nonresident
alien or if you became a nonresident alien after receiving it and
before the end of the year.

For the part of the year you are a nonresident alien, you are taxed on
income from U.S. sources and on certain foreign source income treated
as effectively connected with a U.S. trade or business. (The rules for
treating foreign source income as effectively connected are discussed
in chapter 4 under Foreign Income.)

And finally, be aware of the expatriation tax.

http://www.irs.gov/publications/p519/ch04.html#en_US_publink1000154092

Expatriation After June 16, 2008

If you expatriated after June 16, 2008, the expatriation rules apply
to you if you meet any of the following conditions.

1.

Your average annual net income tax for the 5 years ending before
the date of expatriation or termination of residency is more than
$139,000 (if you expatriated or terminated residency before January 1,
2009).
2.

Your net worth is $2 million or more on the date of your
expatriation or termination of residency.
3.

You fail to certify on Form 8854 that you have complied with all
U.S. federal tax obligations for the 5 years preceding the date of
your expatriation or termination of residency.

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Posted by Alan on October 11, 2009, 5:31 pm

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HudRiv wrote:

> If I abandon my green card, will I be a dual status alien for that

> year's tax return? I live in my own country for two years and it is my

> tax home.

A lawful permanent resident (green card holder) who desires to
abandon residency establishes the last day of residency on the
day he/she submits the necessary document(s) to USCIS or a US
consular officer. See page 4 of Pub 519.

This makes the individual dual status for the year (Resident @
beginning, Nonresident @ end). Filing instructions start on page
33 of Pub 519.

You would be subject to the expatriation tax rules if you are
considered to be a long-term resident of the US. This would be
the case if you were a lawful permanent resident (green card
holder) for at least 8 of the last 15 years. See page 22 in Pub
519 for details.

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Posted by removeps-groups@yahoo.com on October 11, 2009, 8:17 pm

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> You would be subject to the expatriation tax rules if you are

> considered to be a long-term resident of the US. This would be

> the case if you were a lawful permanent resident (green card

> holder) for at least 8 of the last 15 years. See page 22 in Pub

> 519 for details.

Just having a green card for 8 years is not sufficient. You also need
to have a tax bill of 139k or more or a net worth of $2 million in
order for the expatriation tax to apply.

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<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
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<< to this newsgroup as well as our anti-spamming policy >>
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Posted by Alan on October 12, 2009, 1:13 pm

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removeps-groups@yahoo.com wrote:

>> You would be subject to the expatriation tax rules if you are

>> considered to be a long-term resident of the US. This would be

>> the case if you were a lawful permanent resident (green card

>> holder) for at least 8 of the last 15 years. See page 22 in Pub

>> 519 for details.

> Just having a green card for 8 years is not sufficient. You also need

> to have a tax bill of 139k or more or a net worth of $2 million in

> order for the expatriation tax to apply.

Don't forget Line 6 in Part B of Form 8854. He has to have
complied with tax filing and tax payment obligations for all of
the preceding five years. Otherwise, the amount of his tax bills
or net worth is irrelevant.

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<< The foregoing was not intended or written to be used, >>
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<< that may be imposed upon the taxpayer. >>
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<< The Charter and the Guidelines for submitting posts >>
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