A bill to amend the Internal Revenue Code of 1986 to revise the tax rules on expatriation, to modify the basis rules for nonresident aliens becoming citizens or residents, and for other purposes.

Summary

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. 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. Excludes $600,000 in gain from taxation. 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. Treats as the basis of property of a nonresident alien individual who becomes a U.S. citizen or resident, for purposes of determining gain or loss, the property's fair market value on the date on which: (1) the individual becomes a citizen or resident; or (2) the property first becomes subject to tax by reason of being used in a trade or business or by reason of becoming a U.S. real property interest.

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Documents

3 official files

• Introduced in Senate (text)

  Introduced in Senate · EN · 6 April 1995

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• Introduced in Senate (PDF)

  Introduced in Senate · EN · 6 April 1995

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• Introduced in Senate

  summary · EN · 6 April 1995

  Open at official source

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