definition of long term permanent resident

[CalGreenCard]

It is my understanding that a green card holder who is considered a "long term permanent resident" is potentially subject to US taxes for 10 years after relinquishing US residency (giving up their green card); however, a green card holder who gives up their green card sooner (before becoming a "long term resident") would only have to pay US tax up to and including the year they surrender their green card.

I obtained my GC in Sept 2005. Originally I thought that nothing would hold me back from applying for US citizenship as soon as eligible. However it seems to me that the USA has dug itself into a very deep hole (deeper than other countries) and I'm now wondering if tying myself to the USA's financial problems for at least 10 years (which is what I'd be doing by taking US citizenship) is such a good idea after all.

However, the same tax effect occurs if I keep my GC for long enough to be considered a long term resident.

So my question is--how long, precisely, do I have to make this decision? I obtained my GC in Sept 2005. I know that if one is a GC holder for 8 years one is considered a "long term" resident. But how precisely is this calculated?

If I stay in the USA with my GC until Jan 2012, I will have been a GC holder for part or all of 8 calendar/tax years (2005-2012 inclusive). Is that the point at which the potentially undesirable tax consequences of being a long term resident would kick in for me? Do I have until Dec 2011 to leave if I want to avoid this?

Thanks in advance for all your help!!

[nelsona]

Giving up GC is a tad more easily accepted by the IRS that giving up US citizenship.

The criteria are pretty well spelled out in IRS PUb 519. You need to have been non-resident for more than 5 of the past 15 years. Note that residency is determined by SPT and not simply Green card test, so if you spent time before GC as an alien resident (ie. you filed a 1040 due to meeting SPT) that time counts as well.

[nelsona]

Sorry, that paragrapgh was for dul-cit execption.

The LTR criteria is EIGHT years as GC holder, without regard for previous time satisfying SPT.