applies to their worldwide assets, not just assets located
in the United States. Adding to the complexity of the U.S.
tax system, “residency” is determined differently for U.S.
transfer tax purposes than it is for income tax purposes.
For transfer tax purposes, residents are those with a U.S.
domicile – that is, presence in the United States with the
intent to remain indefinitely – at the time of the gift or
death. And when applying for a green
card the investor must declare their
intent to remain in the United States.
formed and administered structure – which frequently
involves a trust –the U.S. transfer tax can be eliminated
entirely for multiple generations. But this requires that
the investor purchase the property via this structure
initially. Other than for the EB-5 investment itself (which
must be in the investor’s personal name), once the
investor purchases U.S. property in his or her name it is
far more difficult to eliminate U.S. transfer tax.
While there is no “one size fits all”
solution for minimizing U.S. tax
for EB-5 investors, it is essential
that the investor plans proactively
before becoming a U.S. green
card holder. Moreover, to minimize
all tax to the extent possible, it is
critically important to know the investor’s goals and
objectives and structure a complete plan accordingly.
For example, if the intent is to hold and not sell the
property, it may be more important to eliminate
transfer - gift and estate - tax through a trust structure
similar to the one discussed above. Alternatively, if
"...the investor can
virtually eliminate
U.S. income tax..."
Thus, once an EB-5 investor resides
in the U.S. he or she is presumed to
be a U.S. resident for transfer tax
purposes, and their worldwide assets
will be subject to U.S. transfer tax, although the higher
exemptions will apply. Fortunately, even if the investor is
not a resident for transfer tax purposes, a tax professional
can easily eliminate most or all U.S. transfer tax with
planning in advance of the investor moving to the United
States. If the investor buys assets through a properly
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