Pre-Immigration Income Tax Strategies and Nuances for First Year Tax Filing

Description

There are numerous tax considerations for a nonresident alien considering becoming a U.S. taxpayer. There is also a window of opportunity for future U.S. residents to take advantage of jurisdictional tax rates. For certain income items not otherwise subject to U.S. taxation, a future taxpayer may want to accelerate income recognition and pay tax on the item before residency.

The current estate tax exemption for foreigners is minuscule compared to the exemption available to residents. Since there is no basis step-up upon commencement of citizenship and no credit given for any exit taxes paid to a prior home country, pre-immigrants should consider strategies to step-up basis in appreciated assets before becoming residents. At the same time, imminent U.S. tax changes add another layer of complexity and necessity to tax planning for future U.S. residents and citizens. International tax advisers working with nonresident aliens need to understand the options available to significantly reduce both income tax and estate and gift taxes for these individuals.

Listen as our authoritative panel of international tax experts explains methods available to reduce overall tax liability for nonresident aliens looking to reside in the United States.