How the US Exit Tax Works when Expatriating

Wealthy US citizens looking to expatriate may be subject to an exit tax upon renouncing their citizenship. If you have a high net worth or a high salary, these are the assessments to be made, forms to be filed, and rules to be followed.

Andrew Henderson and the Nomad Capitalist team are the world's most sought-after experts on legal offshore tax strategies, investment immigration, and global citizenship. We work exclusively with seven- and eight-figure entrepreneurs and investors who want to "go where they're treated best".

Andrew has started offshore companies, opened dozens of offshore bank accounts, obtained multiple second passports, and purchased real estate on four continents. He has spent the last 12 years studying and personally implementing the Nomad Capitalist lifestyle.

Our growing team of researchers, strategies, and implementers add to our ever-growing knowledge base of the best options available. In addition, we've spent years studying the behavior of hundreds of clients in order to help people get the results they want faster and with less effort.

DISCLAIMER: The information in this video should not be considered tax, financial, investment, or any kind of professional advice. Only a professional diagnosis of your specific situation can determine which strategies are appropriate for your needs. Nomad Capitalist can and does not provide advice unless/until engaged by you.

[PastelSkies-nv]

One has to wonder if this is what the Eagles were singing about in the last lines of 'Hotel California':

"Relax', said the night man.
'We are programmed to receive.
You can check out anytime you like...
...but you can NEVER LEAVE!"
(cue long Glenn Frey guitar solo outro)

[FRANKHDIETRICH]

No difference between a feudal serf, and a U.S. citizen. Both are tied to the land. Should be that if you don't live in the country for a year you become disconnected, free, and no longer owe taxes, or forever file papers. There needs to be a change in the law.. Land of the free, and home of the brave, no, I say land of the fee, and home of the slave.

[utsavpaudel]

We want to hear from you on that Billionaire tax evasion case❤️

[fmagalhaes]

Andrew : yes please I would like if you did a video on the billionaire on renouncing.

[chrislanejones]

Nomad team: Would love to hear about Andrew's start. Tell a story about how you started/sold businesses (pool boy service). Would help video SEO even know team nomad is getting a lot of views.

[Krakondack]

So to summarize - unrealized capital gains get taxed at time of renunciation.

[margyiphillips]

I think it is best to renounce before acquiring assets offshore. What do you think?

[ColinTalksCrypto]

Great video, Andrew. I have been considering renouncing my US citizenship. I am wondering your thoughts on this: I am a crypto holder. I moved to Puerto Rico a few years ago to avail myself of 0% on capital gains. If, in the future, I should decide to renounce my citizenship, I presume I would not owe any exit tax (at least as far as any capital gains are concerned) because all my capital gains are at 0%. What are your thoughts on this?

[robinsattahip]

Stay away from me when I'm filling out my FBAR. I almost never feel that level of hatred and anger. America really blows chunks.

[hurolinci]

The jig is up. People gonna start jumping off board.

[dlukton]

What about the case of someone who has a net worth of $5 million... and, about a year before renouncing, he takes $4 million of that and puts it in gold and cryptocurrency; and then upon renouncing, he "neglects" to tell the IRS about the gold and cryptocurrency. Of course, in order to buy all that gold and crypto, he'd have to go through the banking system, and the banks would have a record; indeed, the banks might even just inform the IRS at the time of the transaction, because it could be viewed as a "suspicious activity".

[Atem_S.]

At least Canada we don't have this system of extortion!

[ATLAS_]

What happens to funds contributed to Roth IRAs?

[robertpolleros]

Capital gain tax is 20% max. But after expatriating, you have a 30% flat rate tax on everything. So what's the point in avoiding paying (Exit-) tax while still a resident?

[harsharao]

Andrew....how about a situation where on.spoise is US Citizen and other is not?..would it LEGALLY save taxes?

[midcentb]

The covered expat criteria of "net worth over $2 million" is too low in this day and age. Since when $2 million test has been around?

[vitfrol]

What about 11, 8 million lifetime gift exemption that you could use to bring your worth under 2mil before you renounce?

[wanderingdoc]

My NW is ~$1.5M. Taxable income ~$180K. Plan to move to Taiwan or Japan in a couple years. I'm young. Should I keep my NW below $2M meanwhile? First time I am hearing this.

[Michael-]

What will they do when all the creators have left and all the takers have turned up?

[rubensnogueira]

4:03 It could be worse: be born a male baby to a mindless Singapore PR holder and, 20 years later, be arrested on the spot as a draft dodger when doing a simple backpacking trip to Singapore...