# Relinquishing US citizenship and tax consequences



## gug (Jun 16, 2013)

Born in US but living in Canada as a Canadian citizen for quite a few years, I am frustrated by the IRS reporting requirements and the cost of reporting while actually not owing them any taxes. I am reluctantly considering giving up my US citizenship to rid myself of the cost, bother and worry but am not sure if this will create even more of a financial problem. I do not make or have enough to be considered a "covered expatriate", so am not liable for the regime imposed by form 8854, except that I know I would have to file that form once on expatriation. What I would like to find out, and what is unclear to me in the instructions I have read re expatriation, is: How will my Canadian RRSPs, TFSAs and Mutual funds be treated for tax purposes in the year I expatriate? Even though |I am not a "covered expatriate", does IRS still treat these funds as sold on expatriation and tax them accordingly? If so, at what rate? Is there a tax exemption for these unless the gains are over a certain amount?


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