January 7, 2022 – Participants Include:
Virginia La Torre Jeker – @VLJeker
John Richardson – @Expatriationlaw
The Background – An Exclusion From Capital Gains
Internal Revenue Code Section 121 provides (in certain circumstances) a $250,000 exclusion from taxation on the capital gain on the sale of a principal residence.
Covered Expatriates, The Exit Tax and “Deemed Capital Gains”
When a covered expatriate renounces US citizenship he/she is subject to a capital gains tax based on the deemed sale of all property. Specifically 877A includes:
26 U.S. Code § 877A – Tax responsibilities of expatriation
Do the words “notwithstanding any other provision of this title” mean that the S. 121 exclusion is not available to “covered expatriates” renouncing US citizenship?
On January 6, 2022 Dubai based US tax lawyer wrote a post discussing this issue:
On January 7, 2022 Virginia joined me to explore this issue in this podcast.