Author Topic: US Expatriation Form 8854  (Read 287 times)

DIY filer

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US Expatriation Form 8854
« on: May 25, 2018, 09:58:50 AM »
I abandoned my US long term permanent resident status in 2017.  I received my green card in 2016, and was a US resident since October 2000.  I moved back to Canada on August 15, 2015.

I have some questions about filling out Form 8854. 
1. How do I answer Part 1 - #5?  Am I a LTR with dual residence in a treaty country, even though I did not claim any treaty benefits upon my return to Canada? I think I should be checking the middle box and give the expatriation date.

2. Do I need to complete Part IV, section B with my answers to the following? 
Your average net income tax liability for the 5 tax years immediately before expatriation (see line 1 in Section A) wasn't more
than $162,000, your net worth (see line 2 in Section A) was under $2 million, and you checked “Yes” on line 6 in Section A; (correct - this is my situation)
• In Section A, you checked “Yes” on lines 3, 4, and 6; or  (No - I didn't check Yes for 3 and 4)
• In Section A, you checked “Yes” on lines 5 and 6. (no - I didn't check Yes for 5 and 6)

3. Part V Balance Sheet. How do I complete line 6 & 7?

I will receive a pension from services performed in the US.  My wife will receive a pension from her work in Canada prior to moving to the US.  I know what the estimated monthly amount I'll receive upon retiring, but I don't know the FMV.  How do I go about answering questions Part V, line 6 & 7?

4. Part V Balance Sheet.  Tax deferred accounts.
Do I also include our Canadian RRSPs, which only received contributions prior to moving to the US? If so, under which line?
Do our US Roth IRAs and traditional IRAs also be included?  If so, which lines on the balance sheet?
Should our 529 plan also be included in the calculation of our net worth?  If so, which line should it be on?

5. Part V Income statement.  Should dividend income and interest income which we received in our tax deferred accounts be included in the income statement?

Thanks for any and all help you might give! 

Phil Hogan, CPA, CA, CPA (Colorado)

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Re: US Expatriation Form 8854
« Reply #1 on: May 25, 2018, 02:25:43 PM »
Hi there

Please note that the following is for informational purposes only and should not be considered professional advice.

My general thoughts about your issues below:

- In most cases when client hands in their green card you would check 5b
- If you don't meet the tax or $2,000,000 threshold you will not need to complete section B of part IV
- reporting on part V is not always perfect. do you best to get your worldwide assets in the right category. In most cases with defined benefit pension, we use a present value calculation to assess FMV.
- Yes, most assets should be included on the 8854
- income received in a tax deferred account will not need to be reported on part 5 schedule B

Also, note that you'll need to have filed a ROTH election when you entered Canada and a T1135 for any non-registered investment accounts outside of Canada. Assuming you reached the $100,000 cost threshold.

Also, many US brokers will not be able to manage your accounts while you're a Canadian resident. Best to speak to a cross-border financial planner.

Hope that helps.

Phil
Phil Hogan, CPA, CA, CPA (Colorado)
250-381-2400
Hutcheson.ca
phil@hutcheson.ca
* The information contained in these posts should not be construed as professional advice and is for informational purposes only.