So it's not 20% of their cash and investments. This would mean that someone renouncing their US citizenship would have to pay tax on all their unrealized capital gains - if the markets keep falling, that will be a very small sum for most people. The worst of that would be 401k assets - you would lose the benefits of the tax deferral. I expect that the biggest effect will be the cost of accountancy services for those moving abroad. It becomes an even more complex decision - you could retain citizenship and continue to pay tax to the IRS (filing as a non-resident); you could renounce citizenship (at a time when your assets are low), effectively swapping ongoing income tax for a lump of capital gains tax; you could even consider disappearing - if you don't keep assets in the US & don't plan to return then they have no realistic chance of catching you. My advice (worth what you pay for it!) for most people would be to retain your citizenship, keep paying taxes, keep voting & benefit from living in a cheaper environment. Hugh.
________________________________ From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of Philip Lange Sent: Wednesday, October 01, 2008 8:03 AM To: [email protected] Subject: Re: [Liveaboard] Exit Tax Whoops!, Should have checked further, It seems the Bill passed the house but has not been taken up by the Senate.' H.R. 3056 is the House Bill http://www.opencongress.org/bill/110-h3056/show Here is the story on an interesting site for those who are considering relocating. http://www.escapeartist.com/efam/96/exit_tax.html Philip At 09:35 AM 10/1/2008, you wrote: All should be aware that Congress passed, as an amendment to another Bill, signed into law that says if an American Citizen gives up his/er citizenship and becomes a citizen of another country they will forfeit 20% of their cash and investments. Sort of a grand departure tax. Not well known, I only found it by luck. Sorry - can't provide the link. ALSO Social Security requires that you notify them if you change your residency to one outside the country. Not to hard to jump from that to cutting off your check if you do. Make plans accordingly. Philip Be the change you want to see" Philip & Marilyn Lange AE4OV & KD4JRC, ORYOKI Witness 35 Catamaran
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