For purposes of this subtitle-
All property of a covered expatriate shall be treated as sold on the day before the expatriation date for its fair market value.
In the case of any sale under paragraph (1)-
Proper adjustment shall be made in the amount of any gain or loss subsequently realized for gain or loss taken into account under the preceding sentence, determined without regard to paragraph (3).
The amount which would (but for this paragraph) be includible in the gross income of any individual by reason of paragraph (1) shall be reduced (but not below zero) by $600,000.
In the case of any taxable year beginning in a calendar year after 2008, the dollar amount in subparagraph (A) shall be increased by an amount equal to-
If any amount as adjusted under clause (i) is not a multiple of $1,000, such amount shall be rounded to the nearest multiple of $1,000.
If the taxpayer elects the application of this subsection with respect to any property treated as sold by reason of subsection (a), the time for payment of the additional tax attributable to such property shall be extended until the due date of the return for the taxable year in which such property is disposed of (or, in the case of property disposed of in a transaction in which gain is not recognized in whole or in part, until such other date as the Secretary may prescribe).
For purposes of paragraph (1), the additional tax attributable to any property is an amount which bears the same ratio to the additional tax imposed by this chapter for the taxable year solely by reason of subsection (a) as the gain taken into account under subsection (a) with respect to such property bears to the total gain taken into account under subsection (a) with respect to all property to which subsection (a) applies.
The due date for payment of tax may not be extended under this subsection later than the due date for the return of tax imposed by this chapter for the taxable year which includes the date of death of the expatriate (or, if earlier, the time that the security provided with respect to the property fails to meet the requirements of paragraph (4), unless the taxpayer corrects such failure within the time specified by the Secretary).
No election may be made under paragraph (1) with respect to any property unless adequate security is provided with respect to such property.
For purposes of subparagraph (A), security with respect to any property shall be treated as adequate security if-
No election may be made under paragraph (1) unless the taxpayer makes an irrevocable waiver of any right under any treaty of the United States which would preclude assessment or collection of any tax imposed by reason of this section.
An election under paragraph (1) shall only apply to property described in the election and, once made, is irrevocable.
For purposes of section 6601, the last date for the payment of tax shall be determined without regard to the election under this subsection.
Subsection (a) shall not apply to-
In the case of any eligible deferred compensation item, the payor shall deduct and withhold from any taxable payment to a covered expatriate with respect to such item a tax equal to 30 percent thereof.
For purposes of subparagraph (A), the term "taxable payment" means with respect to a covered expatriate any payment to the extent it would be includible in the gross income of the covered expatriate if such expatriate continued to be subject to tax as a citizen or resident of the United States. A deferred compensation item shall be taken into account as a payment under the preceding sentence when such item would be so includible.
In the case of any deferred compensation item which is not an eligible deferred compensation item-
For purposes of this subsection, the term "eligible deferred compensation item" means any deferred compensation item with respect to which-
For purposes of this subsection, the term "deferred compensation item" means-
Paragraphs (1) and (2) shall not apply to any deferred compensation item to the extent attributable to services performed outside the United States while the covered expatriate was not a citizen or resident of the United States.
Rules similar to the rules of subchapter B of chapter 3 shall apply for purposes of this subsection.
Any item subject to the withholding tax imposed under paragraph (1) shall be subject to tax under section 871.
Any item subject to withholding under paragraph (1) shall not be subject to withholding under section 1441 or chapter 24.
In the case of any interest in a specified tax deferred account held by a covered expatriate on the day before the expatriation date-
For purposes of paragraph (1), the term "specified tax deferred account" means an individual retirement plan (as defined in section 7701(a)(37)) other than any arrangement described in subsection (k) or (p) of section 408, a qualified tuition program (as defined in section 529), a qualified ABLE program (as defined in section 529A), a Coverdell education savings account (as defined in section 530), a health savings account (as defined in section 223), and an Archer MSA (as defined in section 220).
In the case of a distribution (directly or indirectly) of any property from a nongrantor trust to a covered expatriate-
For purposes of this subsection, the term "taxable portion" means, with respect to any distribution, that portion of the distribution which would be includible in the gross income of the covered expatriate if such expatriate continued to be subject to tax as a citizen or resident of the United States.
For purposes of this subsection, the term "nongrantor trust" means the portion of any trust that the individual is not considered the owner of under subpart E of part I of subchapter J. The determination under the preceding sentence shall be made immediately before the expatriation date.
For purposes of this subsection-
This subsection shall apply to a nongrantor trust only if the covered expatriate was a beneficiary of the trust on the day before the expatriation date.
For purposes of this section-
The term "covered expatriate" means an expatriate who meets the requirements of subparagraph (A), (B), or (C) of section 877(a)(2).
An individual shall not be treated as meeting the requirements of subparagraph (A) or (B) of section 877(a)(2) if-
In the case of any covered expatriate who is subject to tax as a citizen or resident of the United States for any period beginning after the expatriation date, such individual shall not be treated as a covered expatriate during such period for purposes of subsections (d)(1) and (f) and section 2801.
The term "expatriate" means-
The term "expatriation date" means-
A citizen shall be treated as relinquishing his United States citizenship on the earliest of-
Subparagraph (A) or (B) shall not apply to any individual unless the renunciation or voluntary relinquishment is subsequently approved by the issuance to the individual of a certificate of loss of nationality by the United States Department of State.
The term "long-term resident" has the meaning given to such term by section 877(e)(2).
The term "early distribution tax" means any increase in tax imposed under section 72(t), 220(f)(4), 223(f)(4), 409A(a)(1)(B), 529(c)(6), 529A(c)(3), or 530(d)(4).
In the case of any covered expatriate, notwithstanding any other provision of this title-
Solely for purposes of determining any tax imposed by reason of subsection (a), property which was held by an individual on the date the individual first became a resident of the United States (within the meaning of section 7701(b)) shall be treated as having a basis on such date of not less than the fair market value of such property on such date. The preceding sentence shall not apply if the individual elects not to have such sentence apply. Such an election, once made, shall be irrevocable.
If the expatriation of any individual would result in the recognition of gain under section 684, this section shall be applied after the application of section 684.
The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.
26 U.S.C. § 877A
Inflation Adjusted Items for Certain YearsFor inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under section 1 of this title.
EDITORIAL NOTES
AMENDMENTS2018-Subsec. (g)(6). Pub. L. 115-141 substituted "220(f)(4)" for "220(e)(4)".2017-Subsec. (a)(3)(B)(i)(II). Pub. L. 115-97 substituted "for 'calendar year 2016' in subparagraph (A)(ii)" for "for 'calendar year 1992' in subparagraph (B) thereof".2014-Subsec. (e)(2). Pub. L. 113-295, §102(e)(2)(A), inserted "a qualified ABLE program (as defined in section 529A)," after "529),".Subsec. (g)(6). Pub. L. 113-295, §102(e)(2)(B), inserted "529A(c)(3)," after "529(c)(6),".
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 2017 AMENDMENT Amendment by Pub. L. 115-97 applicable to taxable years beginning after Dec. 31, 2017, see section 11002(e) of Pub. L. 115-97, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 2014 AMENDMENT Amendment by Pub. L. 113-295 applicable to taxable years beginning after Dec. 31, 2014, see section 102(f)(1) of Pub. L. 113-295, set out as a note under section 552a of Title 5, Government Organization and Employees.
EFFECTIVE DATESection applicable to any individual whose expatriation date is on or after June 17, 2008, see section 301(g)(1) of Pub. L. 110-245, set out as a note under section 2801 of this title.
- Secretary
- The term "Secretary" means the Secretary of the Treasury or his delegate.
- State
- The term "State" shall be construed to include the District of Columbia, where such construction is necessary to carry out provisions of this title.
- United States person
- The term "United States person" means-(A) a citizen or resident of the United States,(B) a domestic partnership,(C) a domestic corporation,(D) any estate (other than a foreign estate, within the meaning of paragraph (31)), and(E) any trust if-(i) a court within the United States is able to exercise primary supervision over the administration of the trust, and(ii) one or more United States persons have the authority to control all substantial decisions of the trust.
- individual retirement plan
- The term "individual retirement plan" means-(A) an individual retirement account described in section 408(a), and(B) an individual retirement annuity described in section 408(b).
- person
- The term "person" shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.
- taxable year
- The term "taxable year" means the calendar year, or the fiscal year ending during such calendar year, upon the basis of which the taxable income is computed under subtitle A. "Taxable year" means, in the case of a return made for a fractional part of a year under the provisions of subtitle A or under regulations prescribed by the Secretary, the period for which such return is made.
- taxpayer
- The term "taxpayer" means any person subject to any internal revenue tax.
- transaction
- The term "transaction" includes a series of transactions.