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What are the tax liabilities of EB-5 investors?

When my EB-5 process completes and the project developer returns my investment, can I transfer it back to India without paying any taxes?

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    BoBi Ahn

    Immigration Attorney
    Answered on

    You should consult an international tax advisor/accountant regarding this issue.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    Generally, return of capital should not be a taxable event. EB-5 investors receiving distributions from a project in a regional center or by virtue of their investment in a new commercial enterprise are generally subject to withholding tax until they become a conditional permanent resident in the United States, either through consular processing of their immigrant visa abroad or through adjustment of status to a conditional permanent resident (if in the United States in another lawful immigration status). If you are in the United States, you may be subject to U.S. income tax based on the substantial presence test. Once EB-5 investors become conditional permanent residents in the United States, they are subject to federal income tax on their worldwide income. This includes sources of income in the United States and sources of income outside the United States. However, foreign tax credit may be available on income that is taxed outside the United States if the U.S. has an income tax treaty with an investor's home country. Certain countries do not have income tax treaties with the U.S. EB-5 investors are also subject to other types of taxes, such as estate, gift and generation-skipping transfer taxes. State taxes may also apply. It is important that you start engaging in tax planning with a tax attorney and CPA before you immigrate in order to assess your individual situation and receive appropriate tax planning advice. Generally, an immigration attorney who handles your EB-5 visa matter would be able to refer you to a licensed CPA (certified public accountant) and tax attorney to advise you on various tax rules and regulations in the U.S. and file appropriate IRS forms to ensure tax compliance.

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    Charles Foster

    Immigration Attorney
    Answered on

    When the project developer returns the original capital investment of at least $500,000, the same is not taxable in the U.S. and may be transferred back to India. As a lawful permanent resident, be it conditional or otherwise, you're only subject to taxation on your earned income.

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    Marko Issever

    EB-5 Broker Dealer
    Answered on

    The income tax liability on the investment income from the EB-5 investment starts immediately, regardless of where you live. However, when you get your principal investment back, there is no tax liability on that since that is getting your capital back and not income.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    You need to check with an international tax attorney.

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    No, unless there is a tax treaty between the U.S. and India that grants you an exemption, you will be liable for taxes the moment you enter the U.S. and throughout the period until your investment period ends and your money is returned. In essence, expect to pay tax for years. Advisably, talk to tax expert, particularly anyone with international taxation experience.

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    Hassan Elkhalil

    Immigration Attorney
    Answered on

    You are best served if you ask this question to a CPA.

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