At DeWitt PLLC, one of our primary focuses is estate planning strategies that avoid common traps for international clients.
One major issue involves the difference between being considered a resident for income tax purposes and one for transfer tax purposes. Income tax must be paid in cases where the individual has a green card or a “substantial presence” in the country, measured by days present. In addition, this status may be held if the person makes special election to have treatment as a “permanent resident for income tax purposes.”
In these situations, a flat 30 percent tax rate comes into play, unless an estate tax treaty has been arranged between the United States and the individual’s home country.
Transfer taxes span estate, gift, and generation-skipping transfer tax, with capital gains taxes also arising whenever asset transfers are made. When it comes to these types of taxes, the single most important factor is whether the individual is domiciled in the United States for not.
Because the estate tax exemption is much higher for US permanent residents and citizens ($11.18 million) than for non-residents ($60,000), this becomes a core aspect of tax planning for many people. If any questions exist on whether one is considered domiciled in the county, which is not the same as being a resident alien for income tax purposes, it makes sense to seek out a well-qualified tax attorney.
About the Author
Suzanne DeWitt is a respected Florida attorney who maintains a Miami law practice and engages with high-net-worth clients in tax planning capacities.