# Green Card tax implications



## WalkAbout (Jun 17, 2011)

I've been in the US for just 2 weeks and my employer has offered to move forward with a green card application. I'm on a L1A visa. I had two questions:
1. Do I have to wait a period of time after arriving before applying for GC?
2. Has anyone gone through the cons of holding a GC? I'm specifically concerned with tax if I decide to leave. I'm not sure how easy it is to get rid of the GC once leaving.

thanks, WA.


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## Bevdeforges (Nov 16, 2007)

Not sure about the wait period, but as a green card holder you become subject to US taxation pretty much like any US citizen. If you decide to leave, it is possible to give up your green card (and be sure to file a "sailing permit" which recognizes your final US tax obligation and that fact that you're abandoning your green card). 

It may be somewhat more difficult to get a second immigrant visa for the US having given up a green card, however.
Cheers,
Bev


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## Crawford (Jan 23, 2011)

WalkAbout said:


> I've been in the US for just 2 weeks and my employer has offered to move forward with a green card application. I'm on a L1A visa. I had two questions:
> 1. Do I have to wait a period of time after arriving before applying for GC?
> 2. Has anyone gone through the cons of holding a GC? I'm specifically concerned with tax if I decide to leave. I'm not sure how easy it is to get rid of the GC once leaving.
> 
> thanks, WA.


There is no waiting period before applying for a Green card. You are in the fortunate position of having an employer who wants to sponsor you so quickly.

I don't believe there are any cons with getting a GC. 

If you are already a "tax resident" deemed by the amount of time you spend in the US (and I presume you will be deemed one of these since you are moving over on a transfer) then getting your GC will not affect your tax reporting and paying. 

If you decide to leave the States permanently there is a form to complete to relinquish your Green Card so you won't have to continue to fill in a tax form for the IRS each year.

Some of the pros to getting a Green card are: freedom to work for whomever you want; no hassle with the re-issuing of visa every few years.

Look here for more info

Tax Topics - Topic 851 Resident and Non-Resident Aliens


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## WalkAbout (Jun 17, 2011)

*Thanks*

Thanks Bev & Crawford.

I had heard stories that it was hard to give up your green card especially if you hold a lot of assets and/or have a relatively high salary. I have also checked with some accountants but they seem to know little about the process.

thanks for your inputs.

thanks, WA.


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## WalkAbout (Jun 17, 2011)

*Oh no!*

Some new inputs from an accountant.

Once you have held a GC for 8 yrs, if you decide to leave, you are open to captial gains tax on your world wide assets. You have to pay tax on anything over $600k. This is for people earning over $140k/yr or holding $2M worth of world wide assets. Yikes, this is tough! I guess a big decision would need to be made after 7 years of being a GC holder.

Expatriation Tax


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## Bevdeforges (Nov 16, 2007)

WalkAbout said:


> Some new inputs from an accountant.
> 
> Once you have held a GC for 8 yrs, if you decide to leave, you are open to captial gains tax on your world wide assets. You have to pay tax on anything over $600k. This is for people earning over $140k/yr or holding $2M worth of world wide assets. Yikes, this is tough! I guess a big decision would need to be made after 7 years of being a GC holder.
> 
> Expatriation Tax


This is a fairly recent development (last few years) that apparently replaces or supplements a law from the mid-90's that allowed the US to make someone subject to US taxes for an additional 10 years if they renounced their US citizenship "for tax reasons."

FWIW, there is a similar expatriation tax in a number of other countries - designed to keep wealthy folks from moving to neighboring countries with more favorable tax codes. (Johnny Hallyday is the poster child for this in France...)

The basic principle seems to be that (from the government's point of view at least) a green card is the first step toward staying forever in the US and taking US citizenship, whether or not you are thinking along those lines. 
Cheers,
Bev


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## Lemontree1 (Dec 4, 2010)

This is a relevant one for me as well - I'm also an L1 with a company willing to sponsor the green card process. My wife is a US citizen. We have just bought a house and also own one in the UK. I'm wondering whether I should be going for the GC or simply hold onto the L1 since I'm sure it'll renew in 2 years if needed. What really is the advantage to me of a GC? My concern is tax. I'm clearly paying tax here already as a US resident so that's not the issue, it's more about the implications if I leave the country in a few years. I too heard the GC means you have to pay US taxes on your worldwide income forever!


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## Bevdeforges (Nov 16, 2007)

Lemontree1 said:


> This is a relevant one for me as well - I'm also an L1 with a company willing to sponsor the green card process. My wife is a US citizen. We have just bought a house and also own one in the UK. I'm wondering whether I should be going for the GC or simply hold onto the L1 since I'm sure it'll renew in 2 years if needed. What really is the advantage to me of a GC? My concern is tax. I'm clearly paying tax here already as a US resident so that's not the issue, it's more about the implications if I leave the country in a few years. I too heard the GC means you have to pay US taxes on your worldwide income forever!


If you leave the country and don't surrender your green card, then yes, it's "forever." (I've been informed that if you have held your green card and lived in the US for something like 8 or 10 years, then it's "forever" anyhow.)

Your case is a bit more complicated, though. If you and your wife were to leave the US, she will still have to file US taxes (as a US citizen) - and if you're off the hook for US taxes, she'll have to file as "married, filing separately" which can be a huge disadvantage in certain situations.

If the house in the UK is in joint ownership, it will wind up having to be reported on her US tax returns anyhow, but with none of the advantages of joint filing status.

It's a tough call. There are advantages to having a green card over having to renew your visa every few years, but this passion the US seems to have for taxing folks living overseas is getting to be really and truly a PITA.
Cheers,
Bev


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## WalkAbout (Jun 17, 2011)

*Decision*

Lemontree1, the only real advantage as I see it is that a GC will make it alot easier to change jobs and also give some stability if something were to happen like losing your job. For you and I on L1 visas, we are on decent salaries so attaining a new visa is not that difficult once you have the sponsoring employer.

I had not previously considered the GC but the industry I am in is consolidating and I am in upper mgt so if another company acquires my company, I could be out of a job rather quickly. Thats the only reason I am considering at this point as well as the fact that an application from L1A to GC proceeds rather quickly as compared to applying from an E3 or H1B.

You seem to have the added advantage of a US citizen spouse so you could always use her to sponsor you and stay in the country. The need for a GC just for stability purposes then has less value for you.

I'm thinking of applying for the GC to leverage the L1A situation I am currently in. After 5 years, I would need to make a decision where I want to be and if I want to stay, will just have to pay - or look for a loophole like selling everything I own to my family in Australia. I see that the IRS covered that loophole for selling to a US citizen but seems they have no control if you sell to a non US citizen.

When life gives you lemons....make a lemontree?

Good luck in your decision.

thanks, WA.


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## twostep (Apr 3, 2008)

That loophole has already been covered. 
You just have to make decisions.


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## Lemontree1 (Dec 4, 2010)

Wow some great thoughts thank you. I'll cogitate on it for a while although I'm leaning towards staying with the L1. Although if this 100 degree heat continues I might ship back to the UK...


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