Greenspoon Marder International Wealth & Asset Planning Blog: Are All US Citizens Created Equal In the Eyes of the IRS?
International Wealth & Asset Planning Blog
By Edward Brown, Esq.
People may think just because someone is a US citizen or US resident, that person is able to take advantage of the huge estate and gift tax exemptions allowed under the tax code. However, as highlighted again in the recent IRS Private Letter Ruling 201924009, if an individual is a US citizen solely by reason of living or being born in certain US possessions or territories (for example, Puerto Rico, US Virgin Islands, Guam), that individual will be treated as a non-resident non-US-citizen. As such, any US situs property that such individual gives away during lifetime or owns at death may be subject to US taxes much more readily (i.e., tax credits being limited to somewhere between $13,000 and $46,800 per Tax Code Section 2102) than had this person been born in, and remained a citizen of, the contiguous continental United States (who in contrast enjoys a $4,505,800 tax credit, which continues to climb in accordance with an inflation index). Then again, if such person owns no assets in the United States (meaning the fifty states and the District of Columbia), this individual can totally avoid US estate taxes and gift taxes that would otherwise have been imposed on such other United States citizens. In any event, planning options exist that can avoid unnecessary taxes. See Tax Code Sections 2102, 2107, 2208, 2501(b), 2501(c) and 877(b).
About Greenspoon Marder Greenspoon Marder is a national full-service business law firm with 240 attorneys and 26 locations across the United States. We are ranked amongst American Lawyer ’s Am Law 200, as one of the top law firms in the U.S. since 2015. Since our inception in 1981, our firm has been committed to providing excellent client service through our cross-disciplinary, client-team approach. Our mission is to understand the challenges that our clients face, build collaborative relationships, and craft creative solutions designed and executed with long-term strategic goals in mind. We serve Fortune 500, middle-market public and private companies, start-ups, emerging businesses, individuals and entrepreneurs nationwide.
MEDIA CONTACT natalie.villanueva@gmlaw.com
This Greenspoon Marder LLP Client Alert is issued for informational purposes only and is not intended to be construed or used as general legal advice nor a solicitation of any type. Please contact the author(s) or your Greenspoon Marder LLP contact if you have any questions regarding the currency of this information. The hiring of a lawyer is an important decision. Before you decide, ask for written information about the lawyer’s legal qualifications and experience.
