Expatriation Tax Reform Act of 1996

Summary

Expatriation Tax Reform Act of 1996 - Amends the Internal Revenue Code to provide that if a U.S. citizen relinquishes citizenship, all property held by such citizen at the time immediately before relinquishment shall be treated as sold at such time for its fair market value and any gain or loss shall be subject to U.S. income tax. Permits an expatriate to elect to continue to be taxed as a United States citizen, in which case the provisions applicable to other expatriates will not apply. Excludes $600,000 in gain from taxation, except for allocable gain from interest in a beneficiary's qualified trust. Allows an expatriate to elect to have property made subject to tax in the same manner as if the individual were a U.S. citizen if the individual: (1) provides security for payment of tax; (2) consents to waiver of treaty rights that would preclude tax assessment or collection; and (3) complies with other requirements prescribed by the Secretary of the Treasury. Conditions that the election shall apply to all of the expatriate's property and shall be irrevocable. Directs that if an election is made to defer tax: (1) no amount shall be required to be includible in gross income; and (2) the expatriate's tax for the taxable year in which such property is disposed of, shall be increased by the deferred tax amount, regardless of whether gain or loss is recognized in whole or in part. Limits the amount of estate, gift, and generation-skipping transfer taxes in the event of such an election. Excepts U.S. real property interests and interest in certain retirement plans. Prescribes rules for the treatment of an expatriate's interests in a trust. Terminates, on the date on which property held by an individual is treated as sold under this Act, any deferral of recognition of income or gain and any extension of time for payment of tax. Imposes a tentative tax, immediately before the expatriation date, on income required to be included equal to the amount that would be imposed if the taxable year were a short taxable year ending on the expatriation date. Disallows the exclusion from gross income of the value of any property acquired as a gift, bequest, devise, or inheritance received from a covered expatriate whose expatriation date occurs on or after February 6, 1995. Requires the filing of certain information by expatriates.

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3 official files

• Introduced in Senate (text)

  Introduced in Senate · EN · 21 March 1996

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• Introduced in Senate (PDF)

  Introduced in Senate · EN · 21 March 1996

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• Introduced in Senate

  summary · EN · 21 March 1996

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