High net worth portfolio advice

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mrspock
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Re: High net worth portfolio advice

Post by mrspock »

marky2kk wrote: Mon Jul 20, 2020 6:15 am
mrspock wrote: Sun Jul 19, 2020 5:01 am
marky2kk wrote: Thu Jul 16, 2020 10:17 am ..

What people ignore is that you are not a U.S. citizen and that you don't plan to stay in the U.S. forever. This opens up unique opportunities to save capital gains tax. The worst thing to do in terms of taxes is, in fact, become a U.S. citizen---and it's not even close.
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I have some bad news for you and OP. If you have unrealized capital gains, you cannot leave the country with your "spoils" without handing Uncle Sam his capital gains taxes aka "exit tax" .

From the IRC:
If you expatriated on or after June 17, 2008, the new IRC 877A expatriation rules apply to you if any of the following statements apply.

- Your average annual net income tax for the 5 years ending before the date of expatriation or termination of residency is more than a specified amount that is adjusted for inflation ($151,000 for 2012, $155,000 for 2013, $157,000 for 2014, and $160,000 for 2015).
- Your net worth is $2 million or more on the date of your expatriation or termination of residency. <---- This one
- You fail to certify on Form 8854 that you have complied with all U.S. federal tax obligations for the 5 years preceding the date of your expatriation or termination of residency.
If any of these rules apply, you are a “covered expatriate.”
Once you have over $2m, it's game over. The exit tax is the same as if you were a US citizen and renounced. As such, don't try to get too clever here, or you might find that when you try to wire out the money it doesn't work so well, or the next time you go through US customs you wind up in secondary with some awkward questions to answer.
That's misleading to say the least. The expatriation tax only applies to U.S. citizens or >long-term< residents:
The expatriation tax provisions under Internal Revenue Code (IRC) sections 877 and 877A apply to U.S. citizens who have renounced their citizenship and long-term residents (as defined in IRC 877(e)) who have ended their U.S. resident status for federal tax purposes.
https://www.irs.gov/individuals/interna ... iation-tax . Read up on IRC877(e) how long-term residents are defined:
“’long-term resident’ as any individual (other than a citizen of the United States) who is a lawful permanent resident of the United States in at least 8 taxable years during the period of 15 taxable years.”
Fair point. But I’m pretty sure OP passes the 8 year test if they have a GC and has been at FB long enough to clear 10m-15m.
LeftCoastIV
Posts: 218
Joined: Wed May 01, 2019 7:19 pm

Re: High net worth portfolio advice

Post by LeftCoastIV »

OP - personally, I would edit your original post to remove reference to the name of your employer and their stock, and replace with a generic statement like "high-growth tech stock", and remove speculative statements about who in your family may receive family real estate, until you have finalized those plans. You can get the same (great) advice from this forum, and also take appropriate precautions to protect your identity and future headaches. I am admittedly paranoid on this topic.

I assume in "real life", you are being discrete about who knows the extent of your financial success, outside of those making reasonable guesses based on your tenure at the company.
GMT-8
Posts: 190
Joined: Fri Mar 26, 2010 5:11 pm

Re: High net worth portfolio advice

Post by GMT-8 »

And I would encourage those who are asking for more info about “how he did it” to lay off.
Whether “just curious” or wondering “how I can do that”, it’s none of your business.
KyleAAA
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Re: High net worth portfolio advice

Post by KyleAAA »

GMT-8 wrote: Tue Jul 21, 2020 9:15 am And I would encourage those who are asking for more info about “how he did it” to lay off.
Whether “just curious” or wondering “how I can do that”, it’s none of your business.
That's trivial to answer, anyway. Be a high performer at a high-paying tech company whose stock has appreciated 30%+ per year for a decade. A director earns $1mm+ with most of that being stock even without taking into account 30%+ stock appreciation. Even just a front-line manager would earn $500-600k with half of that being stock. Simply hold all your stock after vest and you hit $10mm pretty quickly in a bull market.
Mofire
Posts: 30
Joined: Thu Aug 06, 2020 9:28 am

Re: High net worth portfolio advice

Post by Mofire »

Get a banker if you don't have one already. Look at Goldman Sachs or Northern Trust.
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