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September 17, 2012

New 2013 IRS Figures Of Interest to all Nonresident and Expatriate Taxpayers

Some of the new figures for 2013 which will come into play if you are a US expatriate, nonresident, or have international tax concerns are as follows:

Unified estate and gift tax exclusion amount. Under the sunset provisions of EGTRRA, for gifts made and estates of decedents dying in 2013, due to a law change, the exclusion amount will be $1,000,000 (down from $5,120,000 for gifts made and estates of decedents dying in 2012).

Gift tax annual exclusion. For gifts made in 2013, the gift tax annual exclusion will be $14,000 (up from $13,000 for gifts made in 2012).

Increased annual exclusion for gifts to noncitizen spouses. For gifts made in 2013, the annual exclusion for gifts to noncitizen spouses will be $143,000 (up from $139,000 for 2012).

Reporting foreign gifts. If the value of the aggregate “foreign gifts” received by a U.S. person (other than an exempt Code Sec. 501(c) organization) exceeds a threshold amount, the U.S. person must report each “foreign gift” to IRS. (Code Sec. 6039F(a)) Different reporting thresholds apply for gifts received from (a) nonresident alien individuals or foreign estates, and (b) foreign partnerships or foreign corporations. For gifts from a nonresident alien individual or foreign estate, reporting is required only if the aggregate amount of gifts from that person exceeds $100,000 during the tax year. For gifts from foreign corporations and foreign partnerships, the reporting threshold amount will be $15,102 in 2013 (up from $14,723 for 2012).

Expatriation, Citizenship and Green Card Surrender. For 2013, an individual with “average annual net income tax” of more than $155,000 for the five tax years ending before the date of the loss of U.S. citizenship is a covered expatriate (up from $151,000 for 2012). Under a mark-to-market deemed sale rule, all property of a covered expatriate is treated as sold on the day before the expatriation date for its fair market value. However, for 2013, the amount that would otherwise be includible in the gross income of any individual under these mark-to-market rules is reduced by $668,000 (up from $651,000 for 2012).

Foreign earned income exclusion. The foreign earned income exclusion amount increases to $97,600 in 2013 (up from $95,100 in 2012).

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