Pre-Immigration Income Tax Strategies and Nuances for First Year Tax Filing

There are numerous tax considerations for a nonresident alien considering becoming a U.S. taxpayer. There is also a window of opportunity for future U.S. residents to take advantage of jurisdictional tax rates. For certain income items not otherwise subject to U.S. taxation, a future taxpayer may want to accelerate income recognition and pay tax on the item before residency.

The current estate tax exemption for foreigners is minuscule compared to the exemption available to residents. Since there is no basis step-up upon commencement of citizenship and no credit given for any exit taxes paid to a prior home country, pre-immigrants should consider strategies to step-up basis in appreciated assets before becoming residents. At the same time, imminent U.S. tax changes add another layer of complexity and necessity to tax planning for future U.S. residents and citizens. International tax advisers working with nonresident aliens need to understand the options available to significantly reduce both income tax and estate and gift taxes for these individuals.

Listen as our authoritative panel of international tax experts explains methods available to reduce overall tax liability for nonresident aliens looking to reside in the United States.

1. Pre-immigration considerations
2. U.S. income tax regime
3. U.S. estate and gift tax
4. Planning strategies
   1. Basis step-up options
   2. Income acceleration
   3. Drop-off trusts
   4. Other planning strategies
5. Impending legislation affecting immigration strategies

The panel will cover these and other critical issues:

• Making transfers to drop-off trusts to reduce taxation
• Removing income from the U.S. tax scope to eliminate future taxation
• Sale and reacquisition strategies to obtain basis step-up
• The effect of potential legislation on pre-immigration tax strategies
• What are the tax filing options available in the first year of filing

Learning Objectives

After completing this course, you will be able to:

• Identify when making gifts could reduce overall taxation for a potential U.S. citizen
• Determine when income acceleration could save substantial tax over time
• Decide how to obtain a basis step-up before becoming a U.S. resident
• Ascertain when a nonresident is subject to U.S. taxation

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of international taxation including residency determination, foreign entity classifications, application of treaty benefits, as well as GILTI, Subpart F, and the related Section 250 deductions.

Strafford Publications, Inc. 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 Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).