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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121099  
Subject: Re: Renouncing citizenship for tax purposes Date: 8/23/2013 12:42 PM
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saunafool: "The U.S. laws actually make it worse. Americans cannot have investment accounts overseas. Or, they can, but the only two things which are accepted investments are cash and U.S. Treasuries.

. . .

If American law makes it impossible for me to extract the money without paying punitive taxes (i.e. 70% when you add the European income tax plus the U.S. tax) and they make it impossible for me to invest locally--because all of my retirement expenses will be in Euros, I would have to consider renouncing citizenship."


I am neither a tax pro nor af ormer expatriate, but neither statement above sounds correct to me. And with regard to the latter statement, the US gives a credt for foreign taxes paid.

http://www.irs.gov/taxtopics/tc856.html

http://www.irs.gov/publications/p514/ar02.html

"You may claim the Foreign Tax Credit for taxes paid in a foreign country. However, you may not claim a tax credit for taxes paid on any income which has been excluded from US taxation using the foreign earned income exclusion or the foreign housing exclusion."

http://taxes.about.com/od/taxhelp/a/ForeignTaxCred.htm

And with respect to the first statement, see http://www.pwc.com/us/en/private-company-services/publicatio...

and http://world.time.com/2013/01/31/mister-taxman-why-some-amer...

Regards, JAFO
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