Surrendering a Green Card after 8+ years can trigger a deemed sale of all global assets at fair market value. Planning before the move-out date is essential.
Advisory and planning for long-term Green Card holders surrendering their card, and for US citizens renouncing citizenship — covering covered-expatriate status, mark-to-market rule and Italian re-entry.
Fixed fee defined case-by-case after a preliminary consultation, based on the patrimony complexity and on whether the engagement covers exit-tax assessment, Form 8854 or full pre-expatriation planning. The preliminary consultation is a 45-minute paid online session ($250); the engagement letter with the agreed fee is signed before any chargeable work begins.
Only if you are a 'long-term resident' (held a Green Card for 8 of the last 15 tax years). For long-term residents, the §877A regime applies and the exit-tax mark-to-market rule kicks in if you also qualify as a 'covered expatriate'.
You are a covered expatriate if any of: (a) your net worth on the expatriation date is ≥ $2M; (b) your average annual US income tax for the 5 tax years before expatriation is ≥ $190K (2024 amount, indexed); or (c) you cannot certify compliance with US tax obligations for the prior 5 years (Form 8854 certification).
Covered expatriates are deemed to have sold all worldwide assets at fair market value the day before expatriation. The resulting gain is taxable in the US, with an exclusion of $866K (2024 amount). The tax must generally be paid in the year of expatriation, though deferral elections exist for certain assets.
Yes. Mark-to-market is computed on all worldwide assets, including Italian real estate, Italian shareholdings, and Italian retirement accounts. Italian taxes are not creditable against this US exit tax (they have not been paid; the gain is deemed). The economic value at issue is the appreciation while you were a US tax resident.
No, the long-term-resident threshold is 8 years out of the prior 15 tax years. Five years of Green Card residence does not trigger §877A. However, you may still be subject to ordinary departure-year filing obligations.
Yes. Possible levers include: gifting assets to non-US-resident family members during the year before expatriation (subject to gift-tax rules), accelerating realizations in higher-basis assets, restructuring entity ownership, and timing the expatriation date relative to tax-year boundaries. Each carries trade-offs and must be modeled on the full facts.
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IIILEX International Consulting LLC is the Florida-based practice of Avv. Dott. Massimo Leonardi — Italian Attorney (Avvocato), Certified Public Accountant (Dottore Commercialista) and Statutory Auditor (Revisore Legale) with 30+ years of Italian practice. We work exclusively on cross-border matters between Italy and the United States.
IIILEX International Consulting LLC · 7901 4th St N STE 300, St. Petersburg, FL 33702 · us@3lex.us · +1 (786) 604-8764 · +39 335 344 9660