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  1. #1
    Join Date
    Apr 2012
    Posts
    1

    Default Initial and Annual Expatriation Statement, Form 8854

    Hello all,

    after living for several years in the United States (California to be precise) as a Permanent Resident (green card holder) my family (wife and two children, age 5, and 7) and I moved to Germany in August 2011 (we are both citizens of EU countries, though not German). Both my wife and I already had our "Abandonment of Lawful Permanent Resident Status" (form 407) submitted and processed by the INS before the end of 2011.

    According to information I got from the IRS, in order to avoid indefinite obligation to file future US tax returns I need to file form 8854 with my 2011 tax return since for tax purposes I am still considered a US long term resident (more than 8 years as a Green Card holder) regardless of my actual immigration status. After study of form 8854 and related instructions I have several questions and hope someone knowledgeable give me some guidance.

    In Detail:

    1. Can I submit form 8854 before I submit my tax return, or is submission together with the return mandatory? Given my complicated tax situation this time I already applied for an extension for both my federal as well as my California return (which means I don't have to file until mid October 2012), including payment of my estimated tax liability as required, but if possible would like to have this taken care of before.

    2. While in the US my wife and I were filing joint returns (my wife did not have any earned income in the past 6+ years). I assume we must nevertheless submit two separate 8854s, one for my wife and one for myself?

    3. As to declaration of assets on form 8854, since during all our time in the US we were residents of California which has community property rule (I hope this is the right expression - I mean half of a couple's property is considered to belong to each spouse, irrespective of who actually earned or acquired it), I assume we would declare half of our net worth on my wife's form and half on mine?

    4. What is the exact meaning of "income tax liability" which has to be stated on form 8854 for the preceding 5 years? I assume it is taxes due, not the gross income those taxes were based on?

    5. Considering our move happened in 2011 (so I will submit form 8854 form tax year 2011, but this happens in 2012) and we filed (and had processed) form 407 in 2011, what are the "5 preceding years" I need to state my tax liability for? Is it 2010, 2009, 2008, 2007 and 2006 (my assumption), or is it 2011, 2010, 2009, 2008, and 2007?

    6. Shall I state only the federal tax liability, or federal tax + California state tax? (and local taxes when applicable)

    7. Since we filed joint returns, how do I split the tax liability between my 8854 and my wife's? Do I enter the full amount on both forms, or half on each, or all on mine and none on my wife's (considering she did not have any income of her own apart from very minor interest income from joint accounts)?

    Thanks in advance to anyone taking the time to answer - these questions are really perplexing me!

    Wolfgang

  2. #2
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Initial and Annual Expatriation Statement, Form 8854

    Tax forms come with instructions.
    Quote Quoting When To File
    If you are required to file Form 1040NR, U.S. Nonresident Alien Income Tax Return, attach this form to your timely filed Form 1040NR and send a copy to the address under Where To File below. If you are not required to file Form 1040NR, submit this form to the address under Where To File below by the due date for filing Form 1040NR.
    Start with the instructions and if you still have legal questions, ask appropriate follow-ups. If you really simply need an accounting professional to prepare the forms for you, tax preparation services are easy to find.

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