If you want to give up your US citizenship, prepare to pay the IRS. As the Wall Street Journal reported on Tuesday, Congress has modified how individuals who renounce their citizenship will pay taxes. If you have a net worth of $2 million or more you will pay tax when you leave as if you sold all your assets.
The new rules do share a similarity with the old rules. The first $600,000 in gains aren’t taxed. However, the old “10-year rule” is gone. Additionally, if an individual who renounces his or her citizenship later gives a gift or an inheritance to a US resident, that gift or inheritance will be taxed at 45%.
If you plan on, or are considering renouncing your citizenship you absolutely need to discuss your situation with a tax accountant and an attorney. If you’re wealthy, just plan on leaving some of your money to the Internal Revenue Service whether you want to or not.
