Season 1 Episode 3:

US Exit Tax, Covered Expatriates, and Planning Ahead: A Legal and Tax Perspective

Renouncing U.S. citizenship or terminating a green card comes with significant tax consequences that extend well beyond paperwork. This episode breaks down expatriation, covered expatriate status, and the planning considerations that can help mitigate unexpected tax exposure.

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Gina Lee and Christopher Klug break down the U.S. Exit Tax and what it means for citizens and long-term green card holders considering expatriation. They walk through the key tests that determine “covered expatriate” status, the mechanics of the mark-to-market regime, and strategies for mitigating unintended tax consequences. Whether you’re planning your exit or advising someone who is, this episode offers essential insights on managing high-stakes tax decisions with long-term implications.

This episode covers:

  • What expatriation means for U.S. citizens and long-term green card holders

  • Who qualifies as a covered expatriate under the income tax, net worth, and compliance tests

  • How the mark-to-market exit tax works and when it is triggered

  • Options to defer exit tax and the trade-offs involved, including interest and ongoing U.S. ties

  • How retirement accounts and other assets are treated differently under the exit tax regime

  • Why expatriation can create double taxation risks in your new country of residence

  • The impact of covered gifts and bequests on U.S. heirs and why advance estate planning matters

Host: Gina Lee

Gina Lee is your trusted guide for U.S. tax law, corporate compliance, and estate planning, providing personalized, strategic counsel to help achieve your financial and personal goals with confidence.

Host: Chris Klug

Chris is a trusted attorney with extensive experience in taxation, corporate planning, mergers and acquisitions, and estate planning. He guides clients through complex tax matters to deliver practical and client-centric solutions.

If this episode resonates with what you’re working through, contact info@basswoodcounsel.com. We’ll help you bring clarity to the key decisions, risks, and priorities, with the right support across our complementary practice areas.

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