U.S. Expatriation

Form 8854 (Initial and Annual Expatriation Statement) applies to U.S. citizens who renounce their citizenship and long-term residents (foreign nationals) who terminate their U.S. lawful permanent resident status.

A Covered Expatriate may be subject to the expatriation tax, under which the individual is treated as having sold all worldwide assets at fair market value on the day before expatriation. The difference between fair market value and the original cost basis is calculated as unrealized gain, and this gain is included in the individual’s taxable income for that year.

In addition, the individual must complete Form DS-4079 and schedule an appointment with the American Institute in Taiwan (AIT) for an in-person interview.