Expatriate Tax Maze (Part 3): The US Expatriation Tax & Covered Expatriate Rules

Giving up US citizenship or handing back a long-held green card sounds like a clean break — but the US tax system has other ideas. Since the HEART Act of 2008, expatriating Americans and long-term green card holders can be hit with a mark-to-market exit tax that treats nearly everything they own as if it had been sold the day before departure.In part 3 of Navigating the Expatriate Tax Maze, Dave Zydek and Peter Trieu of BDO unpack:Who counts as a "covered expatriate" — and the three tests that pull you into the regime (tax liability, net worth, and certification)Who qualifies as a long-term green card holder (the 7-year rule)What the mark-to-market exit tax actually looks like in practiceThe 30% tax on future distributions from non-grantor trusts to former covered expatriatesThe 40% inheritance-style tax on US persons receiving gifts or bequests from covered expatriatesPlanning moves to avoid covered expatriate status — including primary residence sales, lifetime gifting, and spousal transfersEssential listening for anyone considering expatriation or advising clients who are.Brought to you by CAW Network USA in partnership with BDO.