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We have several clients each month surrendering a US passport or Green Card. A common question we are asked is about tax efficient methods for extracting retirement funds from the US.
If we assume a mixed couple (one a US taxpayer and the other a NRA or non resident alien), an approach to consider would be to have:
- the NRA spouse open an account at the brokerage firm,
- the US spouse gift the appreciated assets in this portfolio under the gift tax exemption to the NRA spouse,
- the NRA spouse may, at their discretion, sell these securities and mutual funds which should not be subject to capital gains tax
- reinvest in ideally non-US funds and ETFs if one wishes to also avoid the withholding tax on dividends