# Renunciation impact on Child



## Retiredguy (Jan 19, 2018)

Hello,
I am now a Canadian citizen and am considering renunciation of my US citizenship. I am interested in the impact of this decision on my children.

I was born in the US in the early 50's
I moved to Canada in the early 70's at age 21, getting Landed status, later Permanent Resident and got a job.
I married a Canadian in the late 70's. We had kids in the early 80's.
Starting in 2010 I filed US income taxes and FBAR. I am up to date (2017 yet to do).
In 2016 I retired. Get splitable pension.
In early 2017 I got my Canadian citizenship. 
I am not a covered expatriate.
Have family in the US and want to vacation there sometime. 
I feel more Canadian than American.
I've read some of the threads on this site but have not recognized an answer to these questions:

If I renounce my US citizenship and my adult son wants to get a job in the US, can he still get his US citizenship acknowledged (or whatever word means he can work there)? Is this complicated by my renunciation? What is the process?
Will I have to pay capital gains on my home, even if I am not a covered individual? How is the value of a primary residence determined? I know that it is Mark to Market, but would this mean the value stated on my property tax would be used or is there some other estimate?
Thanks for your time.


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## Bevdeforges (Nov 16, 2007)

Your citizenship status is absolutely independent of that of your son or other children.

Presumably your adult son had his birth reported to the Consulate in Canada (or else he has a US birthplace) but in any event, his citizenship was determined at his birth. If he has a US passport now, nothing changes when you renounce.

If you are not a covered individual, you shouldn't have to pay any sort of taxes on your home or any of your other assets as part of the final tax declaration. (In fact, I've heard that they don't actually follow up that closely on the filing of that form 8854 - especially for non-covered individuals. Once you have your CLN in hand, you're all set, whether or not you have filed.)
Cheers,
Bev


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## Nononymous (Jul 12, 2011)

Depending on the value of your home, you might be wise to renounce sooner rather than later to avoid the possibility of paying the US any capital gains were you to sell the home, since the exemption is only $500k per couple. This might be your motivation already. 

Otherwise you should file your 8854 so that you are under the threshold for owing any sort of exit tax. If a lowball estimate of the home's value is necessary to make the number zero, that's between you and your conscience. (I don't think this is necessarily related to covered expatriate status, but I'm not certain.)

Did you do anything to register your children's births with the US consulate? If not, they would go through the procedure of "claiming" their US citizenship if so desired. (It's not really claiming insofar as the US probably considers them citizens from birth, but just didn't know about them.) Your having renounced would have no impact on this - it's now strictly between them and the US government.


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## Retiredguy (Jan 19, 2018)

I am impressed with the swift response.
We have 3 kids. One went to school in the States and got citizenship. Another is a Canada only kind of person. The third did not (and I did not on his behalf) get status, but might want a job in the US. 
I aim to comply fully with the rules. I would like to minimize any impact. I feel better for your comments and will educate myself further on the process. 
Thanks.


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## Nononymous (Jul 12, 2011)

All three of your kids are US citizens, and were from birth. One chose to document it and live in the US. The others could still choose to do so, but in a strict interpretation of the law, they are and always have been US citizens. 

Technically, the two who live in Canada should be filing US tax returns and all that. But with no record of their existence, they are well and truly off the IRS radar and should remain so for as long as they stay outside the US. With a Canadian birthplace they can easily avoid FATCA reporting. It's a good thing that you did not report their births to the US government. No sense in having them known if they don't want to be known. 

As for you, look at the value of your house and other assets and determine what implications that might have for capital gains taxes if you sell, or the potential taxes owing if you renounce and file the 8854 form to exit the tax system.



> I aim to comply fully with the rules. I would like to minimize any impact.


Those two goals are sometimes in conflict, in which case you'll possibly need to decide what price you're willing to pay in order to follow the law. Remember that in many cases the IRS only knows what you tell them, has for example no ability to determine what your home is worth. But this discussion is pretty abstract until you've run some numbers.


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## Bevdeforges (Nov 16, 2007)

For the son who would want to take a job in the US: As Nonoymous says, he's a US citizen from birth whether or not you reported the birth. The key thing for him will be to get a US SS number. It's a bit of a hassle getting it as an adult. Since the 1980s or so, kids born in the US are issued a social security number at birth, along with their birth certificate.

But that has nothing to do with your renunciation if that's the route you want to take.
Cheers,
Bev


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## Moulard (Feb 3, 2017)

I know this is not specifically related to your question... but something to keep in the back of your mind as you prepare to expatriate..

When you expatriate make sure you are not a covered expatriate. 

Like all of us, at some point you will die, and there are a bunch of stupid rules related to bequests to US citizens (thinking of your children here and potentially their children) estates of covered expatriates.

A US person who inherit assets (or receive a gift, for that matter) from a covered expatriate must pay estate taxes at the highest rate at the time (currently 40% I think).

If I read section 2801 correctly this tax applies even if the wealth in the estate was gained AFTER you had expatriated.

Whether the IRS ever finds out about it is a different matter.


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## Nononymous (Jul 12, 2011)

Yes, that was a point I should have made. If you renounce and go through the exit tax procedure, be sure to avoid covered expatriate status if you have children who are compliant with US taxes (assuming you intend to leave them anything of course).

Also in the original post you noted that you wish to continue visiting family in the US. That is possible after renunciation, you should have the same rights as any other Canadian citizen. In other words, it's easy almost all of the time but it's not guaranteed.


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