U.S. Treasury has published new guidance concerning the exit tax
applicable to expatriates and former long-term green card
holders.
The Heroes Earnings Assistance and Relief Tax Act of 2008 (the
HEART Act) created a "mark-to-market" exit tax applicable
to certain U.S. citizens and long-term green card holders who
expatriate or relinquish their green cards, as well as a succession
tax on U.S. citizens or residents who receive certain gifts or
bequests from these persons. For a discussion of the substantive
provisions of the HEART Act, please see McDermott's On the
Subject dated June 23, 2008, entitled "
HEART Act Applicable to Expatriates and Long-Term
Residents."
On October 15, 2009, U.S. Treasury released promised guidance
concerning the exit tax and related issues in Notice 2009-85 (the
Notice). Guidance on the succession tax will be issued separately.
Until Treasury issues regulations, taxpayers may rely on the
Notice.
