Form 8854 Exit Tax Calculations and Reporting: Minimizing the IRC 877A Expatriation Tax

Webinar: ID# 1026351
Recorded CD or On-Demand
About This Course:
This webinar will provide tax advisers and compliance professionals with a practical guide to the calculations and reporting requirements needed for U.S. taxpayers and exiting green card holders. The panel will discuss the rules of Section 877A, as well as strategies for minimizing the impact of expatriation taxes. The panel will also address the complexities of Form 8854.

The number of U.S. citizens expatriating from the United States has increased by an annual rate of 20% over the past several years. As part of Treasury’s effort to eliminate tax avoidance through expatriation, Congress passed Section 877A, which imposes various taxes on U.S. taxpayers who renounce their citizenship or a long-held green card.

Section 877A creates an exit tax regime for certain U.S. taxpayers who renounce their citizenship, have intentionally relinquished their U.S. citizenship when they become naturalized citizens of another country, or surrender a green card that has been held for more than seven years and whose income or net worth exceed certain thresholds. The exit tax rules also apply to expatriates who fail to certify U.S. income tax compliance for the five years preceding the year of expatriation.

Taxpayers subject to the exit tax must file IRS Form 8854 Initial and Annual Expatriation Statement. This is a detailed and complex form that requires taxpayers to declare a balance sheet reflecting U.S. property owned at the time of exit. The exit tax reporting form is a multi-year filing obligation. Late or incorrect filing of Form 8854 carries a steep $10,000 penalty. Tax advisers need to know the form requirements to avoid expensive tax consequences.

Listen as our experienced panel provides a comprehensive and practical guide to navigating the exit tax regime and completing Form 8854 for U.S. citizens planning expatriation.

  • Exit tax provisions of Section 877A
  • Who is a covered expatriate?
    • The 3 tests
    • The exceptions
    • Determining net worth when trust assets are involved
  • Components of Form 8854
    • Reporting expatriating acts
    • Part III—prior year mark-to-market calculations prior year deferrals
    • Part IV—current year expatriation
      • Net worth and tax liability
      • Property owned on date of expatriation
      • Eligible and ineligible deferred compensation items
      • Tax-deferred accounts
      • Trust interests and elections
      • Mark-to-market calculations
    • Part V—balance sheet and income statement
  • The inheritance tax under Section 2801
  • Pre-exit planning strategies

The panel will review these and other key issues:
  • Which taxpayers are subject to section 877A and must file Form 8854
  • How to calculate the mark-to-market tax on capital gains
  • The types of deferred compensation that are subject to the exit tax
  • How to defer exit tax payments
  • Strategies for avoiding or minimizing the taxes imposed under Section 877A
Learning Objectives

After completing this course, you will be able to:
  • Identify individuals who qualify as “covered expatriates” subject to filing Form 8854 exit tax return
  • Recognize assets, including deferred compensation, that are subject to withholding requirements on exit
  • Determine how to calculate mark-to-market values under the “deemed sale” approach
  • Decide on pre-renunciation strategies to minimize the net impact of the exit tax on an expatriating client
  • Discern circumstances under which a green card holder would be subject to exit tax
How To Access Course And Materials

Handout materials and the phone number for live presentations are made available to you one day prior to the event via email from the presenter. Copies of the presentations are included with recorded versions.
If you order a recorded version of the webinar, CDs will be mailed out approximately 10 days after the live event. Shipping is included in the price of recorded versions.

Continuing Education Credits Available

This program has been approved for 2.0 CPE hours through Strafford Publications. To obtain CPE credit, attendees must participate in the live event (recorded versions do not qualify for credit), return an Official Record of Attendance to Strafford affirming their participation (including the CPE code announced during the program), and pay a processing fee of $35 per person.

Strafford will mail a certificate of credit within approximately two weeks of receiving your completed Official Record of Attendance, provided all required conditions have been satisfied.

Strafford is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit
Form 8854 Exit Tax Calculations and Reporting: Minimizing the IRC 877A Expatriation Tax
Available on CD or On-Demand formats
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