Tax and Estate Planning for Non-Citizens in the United States

Readers

The book is written for financial advisors, tax advisors and estate planners whose clients hold a green card or a nonimmigrant visa, and for the advisors of the families of those clients, whether the family members are clients themselves or heirs. It assumes a reader who knows the U.S. rules for citizens and needs the rules that change when the client is not one.

Where the client comes from Germany, France, Switzerland, Italy or the United Kingdom, the book gives the position of that country in short comparative sections. It reads the estate, gift and income tax conventions as the rule and the statutory regime as the exception.

What the book covers

Parts 2 and 3 settle status. They set out the green card test and the substantial presence test with its exceptions, the effect of each visa category on those tests, the domicile of visa holders and green card holders for the estate and gift tax and between the states, the treaty grace periods for new U.S. domiciliaries, and the compliance of the arrival and departure years. They then address the planning to be completed before the move and the worldwide income, estate and gift tax position that begins with residence.

Part 4 treats what the new resident holds abroad: a foreign company under the controlled foreign corporation rules, foreign real property and other foreign-situs assets taxed in two countries, the residency certification on Forms 8802 and 6166 for treaty relief abroad, the shares of a European family business received by a successor resident in the United States, foreign pensions and life insurance, and foreign and irrevocable trusts.

Parts 5 to 8 cover equity compensation and secondments, the spouse who is not a citizen and the choice between the green card and naturalization, the resident alien as heir of a foreign estate and as beneficiary of U.S. accounts and trusts, and the client who gives up the green card and returns home.

The book stands alone. Like each book of the series, it opens with a foundations chapter on status, situs, the treaties and the reporting forms, adapted to its readers, and gives a working summary wherever its readers must apply a rule that another book of the series treats in full.

The questions the book answers

• When does a visa holder or green card holder become a U.S. resident for income tax purposes, and when a U.S. domiciliary for the estate and gift tax?
• Which treaty grace period applies to a German, French or British national who moves to the United States, and what does it protect?
• What should be settled before the move: basis, unrealized gains, trusts, entities and gifts?
• Which foreign-asset reports start in the first resident year, and which relief procedures exist when they were missed?
• How are a foreign company, foreign real property, a foreign pension and a foreign life insurance policy taxed in the hands of a U.S. resident?
• What does the estate plan of a couple require when one spouse is not a U.S. citizen?
• What must a U.S.-resident heir report on an inheritance from abroad, and when does section 2801 apply?
• What follows when the client gives up the green card and returns to the home country?

The book and the firm’s practice

The author, Caroline E. Ashford, PhD, JD, leads Ashford International Law PC. The firm advises green card holders, visa holders and their families on the same questions, from the planning before arrival to the estate plan of the resident family and the return home, and prepares the related federal returns within the firm. Where the other country is Germany, the firm’s principal attorney, who is also licensed in Germany, advises on both sides; for the other countries the firm works with the client’s advisors there or with advisors from its network.