For immigrant investors ready to start the EB-5 process, or for those already with permanent residency, there are significant U.S. tax implications. As many of these implications come a surprise to applicants and possibly their family members, it is worthwhile consulting with an immigration tax specialist before applying as well...
For immigrant investors ready to start the EB-5 process, or for those already with permanent residency, there are significant U.S. tax implications. As many of these implications come a surprise to applicants and possibly their family members, it is worthwhile consulting with an immigration tax specialist before applying as well as once the process is underway.
Prior to starting the EB-5 process, an immigrant investor should work with an immigration tax specialist to have a plan. Foreign assets and properties may be later subject to U.S. taxes, so in immigrant investor may want to dispose of these assets or create a foreign trust. Income prior to filing an I-526 also has tax implications.
Aside from deciding how to manage assets prior to U.S. permanent residency, an investor will also want to consider the tax implications of the state or states they are considering moving to in the U.S.
Unless an EB-5 applicant is already living in the U.S. under another visa, they must file a form 1040-NR, Nonresident Alien Income Tax return.
At this point, the immigrant investor is a U.S. resident and must file a form 1040, U.S. individual income tax return.
For EB-5 permanent residents who have substantial foreign assets, they may have additionally annual filings to conduct. If they have foreign assets worth over $10,000 they will have to file a Foreign Bank and Financial Accounts (FBAR) report annually.
Also, they will have to comply with the Foreign Account Tax Compliance Act (FATCA) if their foreign assets meet the following requirements: if foreign assets exceed $50,000 at year end or $75,000 at any point during the year for unmarried persons or married persons filing separtely; if foreign assets exceed $100,000 at year end or $150,000 at any point during the year for married persons and filing jointly.
Penalties for incorrect filing add up — and can include a loss of Green Card
EB-5 investors who don’t properly file the forms related to their foreign assets are subject to fines that start at $10,000 U.S. If outstanding taxes, penalties, and interest reach $52,000 the EB-5 investor can be seen as having a “seriously delinquent tax debt” — and lose his or her Green Card.
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Immigration Tax Specialists
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