EB5 Investors Magazine Volume 5, Issue 2 - Page 123

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 EB5INVESTORS.COM 122