Taxation abroad in retirement

[aida2003]

To keep that GC you have to stay resident in the US.

... or come back to the US once a year (unless that's been changed very recently).

 

[nun]

... or come back to the US once a year (unless that's been changed very recently).

That's never been true. To keep the GC you have to be resident in the US. if you are outside the US for extended periods and only visit once a year the immigration service will eventually reassess your status.

 

[MichaelB]

From US Citizen and Immigration Services USCIS - Maintaining Permanent Residence

You may be found to have abandoned your permanent resident status if you:

• Move to another country intending to live there permanently
• Remain outside of the United States for more than 1 year without obtaining a reentry permit or returning resident visa. However, in determining whether your status has been abandoned, any length of absence from the United States may be considered, even if less than 1 year
• Remain outside of the United States for more than 2 years after issuance of a reentry permit without obtaining a returning resident visa. However, in determining whether your status has been abandoned any length of absence from the United States may be considered, even if less than 1 year
• Fail to file income tax returns while living outside of the United States for any period
• Declare yourself a “nonimmigrant” on your tax returns

With matters such as immigration, one's intent is as important as technical compliance with regulations.

 

[nun]

Intent is important, so if you rented a place abroad and had no place to live in the US that might show your intent to abandon the GC. Visiting the US once a year is not enough to keep the GC.

 

[DangerMouse]

We are both on Green Cards and we figure that the easiest way for us to get out of the US tax issue will be when we are done with the US is to just take off for a year or so without doing the reentry permit so then they will automatically take them off us. I think once Dh is finished with work we will be finished with residing in the US. We have no desire to be paying inheritance tax to the US when it doesn't exist in Australia.

 

[nun]

We are both on Green Cards and we figure that the easiest way for us to get out of the US tax issue will be when we are done with the US is to just take off for a year or so without doing the reentry permit so then they will automatically take them off us. I think once Dh is finished with work we will be finished with residing in the US. We have no desire to be paying inheritance tax to the US when it doesn't exist in Australia.

You can avoid US tax on income and gains generated outside the US by doing that, but you'll still have to file as non-resident aliens for any investments, 401ks etc you have in the US and apply the appropriate withholding and tax treaty exemptions. If you are a GC holder you'll also have to file form 8854

 

[Ed_The_Gypsy]

Yes, the long term "tourist visa" is used by many countries to attract retirees. However, keeping the house in the US will probably keep you liable for state taxes as well as federal.

I've heard of interesting real estate ownership laws for non-Mexican citizens in certain regions as well, that require the setting up of trusts, which triggers the foreign trust section of the IRS code.....yuck!

No income tax in the state of Washington.

 

[Ed_The_Gypsy]

We are both on Green Cards and we figure that the easiest way for us to get out of the US tax issue will be when we are done with the US is to just take off for a year or so without doing the reentry permit so then they will automatically take them off us. I think once Dh is finished with work we will be finished with residing in the US. We have no desire to be paying inheritance tax to the US when it doesn't exist in Australia.

From Wikipedia:

If an asset is left to a (Federally recognized) spouse or a charitable organization, the tax usually does not apply.
For deaths occurring in 2011, up to $5,000,000 can be passed from an individual upon his or her death without incurring federal estate tax.[2]

You can avoid probate by holding assets in both names, or in my father's case, with a note on the account to POD (pay on death) to the joint owner of the account (my sister in that case).

See, it ain't so bad living in the US.

Unless you live in California or Taxachusetts or New York, where I am told the taxes are unbelievable.