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On Receiving my Certificate of Loss of Nationality

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Re: On Receiving my Certificate of Loss of Nationality

#141

Post by cr1895 »

_g5q8 wrote: post #132
cr1895 wrote: post #124

Earlier quoted context omitted.

It’s a lot more than complicated taxes and paperwork. If you are a “US Person” you may find it impossible to invest, or deal with certain financial institutions and products at all. I live in the Netherlands. I will face restrictions with my earned pension compared to non-US persons. I am forbidden to use stock trading services like DeGiro. I am not allowed to buy or sell Bitcoin. Just some examples…read the T&Cs of…

>If you are a “US Person” you may find it impossible to invest, or deal with certain financial institutions and products at all. That's literally taxes and paperwork... indirectly, of course, but all the same.

No, it really isn’t. Everyone has taxes and paperwork, some easier than others. Not everyone has the same restrictions on normal financial activities.

Re: On Receiving my Certificate of Loss of Nationality

#142

Post by [deleted] »

welder wrote: post #105
gumby wrote: post #99

Earlier quoted context omitted.

I have no idea why you might be downvoted, but it's extremely unlikely you'll end up owing more than 100%. I'm not an accountant but having filed multi-jurisdiction tax returns myself I don't see a mechanism by which this could happen.

I edited my comment, since 70% tax rate is actually possible depending on the tax rate of the country you're living and whether they have a tax treaty with the US or not.

[deleted]

Re: On Receiving my Certificate of Loss of Nationality

#143

Post by arcticbull »

bingohbangoh wrote: post #139
voisin wrote: post #16

The conversation here at this moment seems to be focused solely on whether or not it is complicated or costly to keep filing US taxes. This misses the point in that the US is the _only_ developed country to impose worldwide taxation on its citizens regardless of where they live. The only other country to do so is Eritrea and the US has routinely criticized them for doing so. Moreover, it makes expats ineligible for c…

I've always thought it was something like a middle finger to americans who leave. "You're not part of this project, get out and stay out." There was a bill in the 1990s to permanently ban any Americans who renounce from coming back, which is hardcore. But we're also a country that to war over a few states leaving. Whatever the reasons, it was equally hardcore to sacrifice so many to stop it. Maybe an intense dislike…

Humorously enough, it was actually brought in as a way of punishing deserters in the civil war. [1]

> Civil War lawmakers were clearly suspicious of Americans who chose to live overseas, especially during the nation's most desperate hour. In his fascinating study of citizenship-based taxation, Kirsch offers a particularly apt quote from one Union lawmaker: "If a man draws his income from our public debt, or from property here, and resides in Paris, skulking away from contributing his personal support to the Government in this day of its extremity, he ought to pay a higher income tax."3

[1] http://www.taxhistory.org/thp/readings.nsf/ArtWeb/3AF72D29CA...

Re: On Receiving my Certificate of Loss of Nationality

#144

Post by Scoundreller »

atourgates wrote: post #110
nicolas_t wrote: post #81

Earlier quoted context omitted.

No, even if you can open a bank account as a US citizen, most services will be restricted. If you want to get a life insurance, they won't have anything for you, if you want to open an investment account, same issue, etc... So, first it's difficult to find banks that'll even accept US citizens and then once you do, it can still be very restrictive.

Is dual citizenship any help with this issue? Say you're a dual US / German citizen. Will that help a German bank more easily bank with you? Do you even have to disclose to the bank that you're a dual citizen, or can you simply present yourself as a German citizen?

It depends.

Some countries won’t let banks refuse to open an account.

I’m sure some people lie to their bank (or continue to hold accounts from before they would ask these questions). But it’s more complicated if your place of birth is USA. But that could be bypassable too if you have the right documents.

Re: On Receiving my Certificate of Loss of Nationality

#145

Post by walshemj »

voisin wrote: post #67
Rapzid wrote: post #55

Earlier quoted context omitted.

In practice the 2021 108k per person foreign earned income exclusion is reasonably large and uncomplicated to claim. After that the list of countries we have tax treaties with is pretty large: https://taxsummaries.pwc.com/united-states/individual/foreig...

As the name implies, that only applies to Earned Income. Not investment or business income not taken as salary or any other form of income.

Not for things like ISA's in the UK

Re: On Receiving my Certificate of Loss of Nationality

#146

Post by asdfasgasdgasdg »

throwaway4711 wrote: post #119

Apart from FATCA, there is also the Expatriation Tax, introduced after Facebook cofounder Eduardo Saverin took his money out of the country by renouncing citizenship [0,1,2]. This often referred to as Exit Tax . It also applies to Greencard holders for more then 8 years, defined as long term permanent residents. The Exit Tax is a huge tax penalty (37%) on anyone owning more than $2 million [3]. [0] https://taxfoundat…

Is that right? From reading the third document you linked:

"IRC 877A imposes a mark-to-market regime, which generally means that all property of a covered expatriate is deemed sold for its fair market value on the day before the expatriation date."

Unless this document is leaving something out, the gains would not be taxed at the marginal income rate unless they are short term gains. Presumably most people with large amounts of unrealized gains would be paying long term capital gains taxes, which are currently a 20% rate.

I thought this provision was simply to ensure that you didn't make large amounts of wealth in the US then skip out on paying taxes on your gains. That seems very reasonable to me, although perhaps I am missing something.

Re: On Receiving my Certificate of Loss of Nationality

#147

Post by arcticbull »

Lordarminius wrote: post #123
digbybk wrote: post #54

Earlier quoted context omitted.

Citizenship is a meaningful thing to most people. Of course it's a legal fiction, but so is marriage. Personally I've never given up a citizenship, but I imagine that it'd be an emotional experience.

I'm interested in knowing:how is citizenship a legal fiction ?

I think its most clear at the extents. For instance, if you live in Point Roberts. [1]

Most people also associate citizenship with right of abode, but that's not always true either. For instance, the BN(O)s from Hong Kong are British Citizens who on that basis cannot live in England or Hong Kong - or anywhere. A separate document, an HKID or a visa, are required for them to live in HK and the UK respectively.

At the end of the day it's just paperwork that decides who negotiates your right to travel and is responsible for coming to get you if things go bad.

It doesn't really mean much else. Where you live and the government you engage with regularly in my opinion has far more bearing on you, your obligations and your benefits.

[1] https://goo.gl/maps/tmia7U6hef3Pvf4v8

Re: On Receiving my Certificate of Loss of Nationality

#149

Post by nickthemagicman »

_g5q8 wrote: post #136
nickthemagicman wrote: post #116

Earlier quoted context omitted.

> It’s clear from your response that you’re not at all familiar with the issues here Im NOT! I'm trying to understand it. It appears that she's giving up her citizenship so she doesn't have to use a VPN and has a better selection of banks and to avoid paying $1000 a year? Seems like a citizenship is worth WAY more than that! Something doesn't add up here! Or do people with a lot of money just have a lot less toleranc…

You can't open a bank account with just a VPN. You also need an address in the US. And even if you do, how do you get money into that account? Do you think your employer in the Netherlands would match your 401(k) deposits?

There's tons of ways to get an address in the U.S. several digitally.

You can transfer money into that account via digital transfer?

OF course your Netherlands employer won't match 401k, they prob don't even know what that is.

Will they match it a 401k if you GIVE UP your citizenship?

Doesn't make sense.

Re: On Receiving my Certificate of Loss of Nationality

#150

Post by LadyCailin »

OldHand2018 wrote: post #130
davidw wrote: post #98

Earlier quoted context omitted.

As someone who lived in Italy for years, it is a total hassle to file US taxes, because you need an accountant that gets all this, and most in the US do not. I agree with her that the system is really bad. We're in the US now, and my Italian wife has none of these hassles: we live in the US and pay taxes in the US and that's that as far as Italy is concerned.

> because you need an accountant that gets all this, As someone who has been through this, perhaps you can explain why this is. What makes it so different from US taxes for people living in the US? You definitely do not need an accountant here.

You clearly never owned non-US mutual funds then.

If you don’t make much money, and what money you do make is cash, you spend that cash immediately instead of putting it in your bank account, and you don’t care about retirement, then sure, it’s easy. Dead simple, in fact!

If you’re pretty normal though, it’s impossible to invest in mutual funds and ETFs outside the US unless you want to deal with PFIC filings (you don’t) and if you live in the EU, you’re double screwed, because they won’t let you buy US mutual funds either. And by the way, the accounting algorithm for FATCA is complete nonsense, because you need the highest value of each account over the year, a number that simply doesn’t exist in most banks, so good luck digging that up properly. And if you don’t, $10k fine if they prosecute.

And for retirement, I’m honestly not even sure what to do there, so yeah.

It’s a shitshow, and I’m not sure what your situation was that you didn’t feel like an accountant was useful.

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