working in a 3rd country

[TN Holder]

Hi,

I am a Canadian citizen and a Green Card holder , I live in US, lost my job and found another one in Kuwait.

I do not want to pay tax neither to Canada nor to US. Since I have broken all my ties with Canada 6 years ago I should not have problem with Canada.
But don’t know what to do with IRS. I have a property and belongings in US, I will not come back to US to live anymore. My plan is to go back to Canada for my retirement.

1-should I get rid of my belongings in US and break all ties same as Canada?
2- If I leave US, automatically my status (GC) will be cancelled after 6 months or so, can I keep my belongings in US and become an alien nonresident?
3- Should inform US gov (IRS and immigration) and cancel my GC? And then keep my property and rent it? What would be my status in US?

Thanks

[nelsona]

To break US tax residency, if you have green card you must ACTIVELY rescind the Grren card, not simply let it lapse. You will still be on the hook for US tax up until that date ofn world income.

But rememebr, all US tax payers living abroad can use the foreign earned income atx exclusion to reduce or elkimnate the US tax on that foreign income.

You may not need to give up GC (for a couple of years anyways).

[TN Holder]

Thanks Nelsona,
Kuwait is a tax free country, so i will not pay a any tax on my income over there, I have worked in Kuwait 20 years ago. As I said I do not have any plan to come back to US ever so keeping GC does not have any advantage for me and will cost a lot if I have to pay tax to IRS.
I have a house, car, 529, IRA, bank accounts and … in US. I will leave first and my family will follow later.

Regards,

[nelsona]

As I said, the foreign earned income exclusion will avoid US tax on the first 90K of your foreign income. I know Kuwait is tax-free.

If your wife and family are still here, will they give up their GC too? You will not be able to give up GC until they leave US as well, or you will nort be let in.

[TN Holder]

I did not understand what did you mean by "exclusion" first, I have read some IRS publications, although they were confusing, but I've got some ideas now.

my offer is way above 90k , that's why my family and I are thinking of giving up the GC, just did not know if we have to give up all our belongings (IRA, home, car, etc...) like what we did when we were moving from Canada to US?

Thank you

[nelsona]

As I said, you will not be able to give up your GC until your family leave, otherwise you will not be admitted to US.

Until you formally give up GC, you are taxable in US jus tlike a citizen. Your family will be taxable until they leave anf give up GC.

[TN Holder]

well, US and Kuwait do not have tax treaty, so the only way to be eligible for exclusion in to be in US less than 30 days each year, in this case my family and I will lose our CG anyway.

I do not undrestand what is the advantage of paying tax to IRS and lose the CG as well?

Thanks

[nelsona]

I think you are missing the point.

You go to Kuwait. You give up GC. Your family however are in US, with GC.

How are you going to visit them? You will not be admitted as tourist, and you have given up GC.

Giving up Gc is not only a tax issue: it's an immigration/mobitlity issue.

So, while you might wish to give up GC the day you leave US, you quite simply will not be able to do this practically.

Thus, you should plan to REDUCE your US tax by normal means avaialble yo any US citizen until that time.

[TN Holder]

thanks, you are correct, and I am very confused after reading IRS publications.

My plan was to leave US in Dec, then come back to US take my family with me in Jan then give up CG. May not be the smartest plan !

How can I get some private consultation? Can you recommend a good lawyer in Chicago area?