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When do I need to fulfill the tax liabilities in the U.S. as an EB-5 investor?

If I participate in the EB-5 program and become a U.S. permanent resident, would I or my children be subject to inheritance tax when I transfer my properties to their names? When do we need to start fulfilling tax liabilities of the U.S.? If my home country of Pakistan has a tax treaty with the U.S., will we be able to benefit from that in any way?

Answers

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    Julia Roussinova

    Immigration Attorney
    Answered on

    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/estate planning attorney to advise you on various tax rules and regulations in the U.S., prepare your estate plan, and file appropriate IRS forms to ensure tax compliance. International estate planning is also necessary.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    When you land with a green card you become subject to U.S. taxation and you may want to consult with both a tax and an estate planning lawyer before landing.

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    Charles Foster

    Immigration Attorney
    Answered on

    Once you become a lawful permanent resident of the United States, on a conditional basis or otherwise, you were subject to all U.S. laws including our tax laws like any other U.S. citizen or permanent resident. Yes, if there is a bilateral tax treaty between the U.S. and Pakistan, you may take advantage of certain provisions.

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    Your tax liabilities are likely to begin when you enter the U.S. a resident. Advisably, consult your accountant or tax expert who is preparing your tax returns, particularly anyone who can help on international taxation and perhaps estate planning.

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    BoBi Ahn

    Immigration Attorney
    Answered on

    You need to consult an accountant or tax advisor regarding this matter.

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    Stephen Berman

    Immigration Attorney
    Answered on

    You need to ask an accountant about that.

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    Sally Amirghahari

    Immigration Attorney
    Answered on

    Once you receive your green card, you are considered as a U.S. person for the purpose of tax. Thus, you are to report your worldwide income for the purpose of income tax. However, as you said if there is a tax treaty between the U.S. and Pakistan, then there will be no double taxation. Also, when you transfer properties to your children while you are alive that would consider a gift which generally would be subject to gift tax. However, for 2019 there is a gift tax exemption of $11.4 million per individual.

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    Vaughan de Kirby

    Immigration Attorney
    Answered on

    As a U.S. permanent resident, you are subject to U.S. taxation. I would recommend you consult with a CPA and a qualified estate planning attorney for your estate questions. I would take this action immediately as proper planning can be very helpful.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    You should contact an international tax expert on these questions.

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    Belma Chinchoy

    Immigration Attorney
    Answered on

    Once you a resident, you need to file U.S. income tax returns. Bilateral tax treaties apply. The tax law is very complex; consult with a qualified adviser.

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    Marko Issever

    EB-5 Broker Dealer
    Answered on

    This is not the appropriate forum to discuss this question. It should rather be addressed to a tax-attorney. In principle though, one becomes a taxpayer under U.S. law once one becomes a permanent resident of the U.S. Therefore, if you gift your properties to your children, before obtaining the green card and while you are alive, neither of you would have any U.S. tax consequences. You might be subject to gift tax in your home country, Pakistan. Similarly, if you are deceased before you obtain the green card, your children might be subject to inheritance tax in Pakistan but not in the U.S. Once all of you become permanent residents of the U.S., you will all then be subject to U.S. taxes in general and your children to U.S. inheritance tax. Generally speaking, when there is a tax treaty between two countries such as the one between Pakistan and the U.S., you are not subject to double taxation. First, the taxes are calculated in both jurisdictions. Then, if the tax you are liable to pay in Pakistan is greater than your tax liability in the U.S., you would then owe no tax to the U.S. as long as you fulfill your tax liability to Pakistan and can provide sufficient documentation to that effect. If the taxes you pay in Pakistan are less than your tax liability in the U.S., again, generally speaking, you will be liable only for the difference of the tax bill for the U.S. and the taxes you paid in Pakistan. The same would apply to inheritance from you to your children. I would urge you one more time to seek advice from a global international tax attorney for the most accurate tax treatment as global international tax issues are very complicated.

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    Robin J Gray

    Immigration Attorney
    Answered on

    The state in which you reside as well as the U.S. have different laws pertaining to inheritance tax. The IRS has an estate tax provision, which can tax qualifying estates with over 11.9 million dollars, but not necessarily an inheritance tax provision. Your best bet would be to consult a tax attorney with knowledge of foreign tax treaties and implications to discuss estate planning as part of your strategy to participate in the EB-5 program.

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    Daniel A Zeft

    Immigration Attorney
    Answered on

    U.S. permanent residents are subject to U.S. taxes on their worldwide income. Inheritance taxes apply after a person dies.

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