US Expatriation Exit Tax Calculator
US citizens and long-term green card holders face an exit tax on unrealized gains when expatriating. The mark-to-market tax treats all assets as sold on the day before expatriation.
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Frequently Asked Questions
How does the US exit tax work?
US exit tax (IRC Section 877A) explained: Who it applies to: US citizens renouncing citizenship; long-term green card holders (held 8+ of last 15 years) abandoning status; "Covered expatriate" thresholds (2026): Average annual net income tax for 5 preceding years: $206,000 (2026 indexed); Net worth on date of expatriation: $2M+; Failure to certify tax compliance for 5 years; If covered expatriate: mark-to-market tax: all worldwide assets deemed sold at FMV on day before expatriation; capital gains tax on unrealized appreciation; exclusion amount: $866,000 (2026 indexed) excluded from gain; IRAs/pension plans: special 30% withholding tax on distributions; deferred compensation: 30% withholding; gifts/bequests to US persons after expatriation: covered by Section 2801 (recipient pays 40% tax); Cost of renouncing: State Department fee: $2,350; tax compliance: $50,000-200,000 in professional fees; exit tax payment due on next tax return.
Which countries are most popular for wealthy US expatriates?
US expatriate destination analysis: Tax-friendly destinations for HNW Americans: Portugal (Non-Habitual Resident regime): flat 20% tax on Portuguese-source income; foreign income tax-exempt for 10 years; Golden Visa: €500K real estate → residency path to citizenship; timing: NHR regime ending December 2024 for new applicants — transitional rules apply; Monaco: 0% income tax; no wealth tax; requires €1M+ property purchase/rent; physical presence requirements; United Arab Emirates (Dubai): 0% income tax; business-friendly; thriving expat community; requires UAE residency; Singapore: 22% top rate (reducing); territorial tax (only local income); no capital gains tax; requires Employment Pass or investment visa; Greece: 15-year flat tax option for new residents; €500K minimum; Cayman Islands: 0% income and capital gains; British territory, English common law; Caribbean citizenship: Dominica $100K, St. Kitts $250K+; passports for second citizenship planning (not eliminating US tax until renunciation).
When should I work with a family office vs. private bank?
Family offices (single or multi) make sense at $50M+ in investable assets. Below that, private banking (JP Morgan Private Bank, Goldman Sachs PWM, UBS) offers similar services with lower minimums ($5-25M). Family offices provide consolidated reporting, direct deal access, and custom investment mandates unavailable at private banks. Multi-family offices (Bessemer Trust, Glenmede) offer a middle ground at $10M+ with family-office-level service at lower cost.
How much should ultra-high-net-worth individuals keep in cash?
Most wealth advisors recommend 3-5% of liquid net worth in cash/cash equivalents for UHNW individuals — enough to cover 12-24 months of lifestyle expenses plus opportunistic investments. Excess cash above this benchmark costs 5-8% annually in opportunity cost vs. diversified portfolios. Treasury bills, money market funds, and short-duration bonds provide liquidity with yield while maintaining capital preservation objectives.
US Expatriation Exit Tax Calculator — 2026 Guide
US citizens and long-term green card holders face an exit tax on unrealized gains when expatriating. The mark-to-market tax treats all assets as sold on the day before expatriation. Sophisticated wealth planning requires understanding the interplay of investment returns, tax efficiency, legal structure, and generational transfer. High-net-worth individuals who work with dedicated wealth advisors typically outperform self-managed portfolios by 1-3% annually after fees — a significant difference at scale.