Expatriation and Exit Tax Planning: Section 877A, Covered Expatriates, and Section 2801 Rules

This webinar will provide international tax advisers with a practical and technical analysis of the U.S. expatriation rules, including the Section 877A exit tax regime, covered expatriate classification, Form 8854 compliance requirements, and significant 2025 developments affecting gifts and bequests from covered expatriates. Our panel of experienced international tax attorneys will explain how expatriation can trigger immediate income tax consequences, future transfer tax exposure, and complex reporting obligations for both expatriates and their families.

Covered expatriates are subject to tax on the deemed sale of all assets at fair market value. A covered expatriate is anyone who either (1) has a net worth of $2 million or more on the day of expatriation, (2) has an average net income tax for five years before expatriation exceeding $211,000 (2026), or (3) fails to certify compliance with U.S. laws by completing Form 8854.

Recent regulations issued under Section 2801 provide long-awaited rules governing gifts and bequests received by U.S. citizens or residents from covered expatriates. These transfers are taxed at the highest estate and gift tax rate, currently 40%, and the tax is paid by the recipient rather than the expatriate. These rules create new compliance and reporting considerations for taxpayers, beneficiaries, trustees, and advisers.

Listen as our adept panel discusses covered expatriate status, exit tax calculations, Section 2801 inheritance tax rules, and practical planning strategies for international tax practitioners advising high net worth individuals, globally mobile taxpayers, and families facing expatriation-related tax issues.