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Recently, I was going through some blog archives and picked out some of the most interesting questions I’ve received. Hope that you enjoy, and profit from the answers!
Q. Are there any pitfalls to be aware of as a dual citizen of the United States and Canada? Plus, any recommendations for residence?
A. Both the United States and Canada recognize dual nationality so you won’t be required to choose between U.S. and Canadian citizenship. However, dual citizenship won’t eliminate your obligation to comply with U.S. tax filing and reporting requirements. These apply to all U.S. citizens, no matter where they live or whatever additional nationalities they possess. Also, if you have children, Uncle Sam may require them to serve in the U.S. military for whatever future wars our esteemed leadership wishes to involve us.
As for residence, a lot depends on whether you have income coming from sources in the United States or Canada. If you do, you may want to reside in a country with a tax treaty with one or both countries so as to benefit from reduced withholding taxes. You need to review the terms of the actual treaty, though, to see how the income will be taxed in your new country of residence.
Q. My brother-in-law in Japan has purchased seven bars of silver (140 oz in all) in the United States. He wants us to bring them from the United States to Japan when we visit him later this month. What preparations do I need to make in advance in order to avoid any complications at the U.S. border?
A. Silver bars are not “monetary instruments.” That means that when you depart the United States, they need not be declared on Treasury Form 105, “Report of International Transportation of Currency or Monetary Instruments.” However, you will need to complete Census Bureau Form 7525-V, “Shipper’s Export Declaration.” Form 7525-V is required only for exported commodities with a value exceeding $2,500. At current silver prices of $35/oz., the bars would be worth well over this reporting threshold.
There may also be reporting formalities, and possibly customs duties payable, when you enter Japan. I am not familiar with these rules. You should contact Japanese customs authorities before you leave to determine how they deal with silver imports.
Of course, you should also bring proof of ownership of the silver bars with you. Since your brother-in-law purchased them it may also be helpful to have a letter from him authorizing you to transport them to Japan on his behalf.
Q. I have a GoldMoney account. Is this reportable as a “foreign account?”
A. Yes, it is reportable. In February 2011, the Treasury Department issued regulations that require U.S. persons to report “an account with a person that is in the business of accepting deposits as a financial agency.” The rules are effective for 2010 and thereafter. A financial agency is “a person acting for a person as a financial institution, bailee, depository trustee, or agent, or acting in a similar way related to money, credit, securities, gold, or in a transaction in money, credit, securities, or gold.” Basically, what the financial agency obligation means is that if you entrust a foreign person or entity – not just a bank – with your money, securities, or gold, the U.S. Treasury wants to know about it. For instance, if you buy gold overseas and pay a custodian a fee for safekeeping it, that custodian is probably acting as a financial agency. This is part of what GoldMoney does, and for this reason I would consider the account reportable on Schedule B of your personal tax return and on Treasury Form 90-22.1.
Q. If I give up U.S. citizenship and later change my mind, can I get my passport back?
A. Loss of U.S. citizenship is generally irrevocable. However, you could apply for residence in the United States like any other foreigner and potentially acquire permanent residence and eventually, a passport. I personally know someone who expatriated, and later successfully applied for a green card. He is now living in the United States and after five years permanent residence will be eligible to reacquire U.S. citizenship and passport.
I also have a client who lost his U.S. nationality twice! He lost it the first time involuntarily after serving in the military forces of a foreign country, and reacquired it once he was discharged from that military. Many years later, he voluntarily expatriated a second time.
Keep those questions coming! And if you don’t want to wait for me to answer them, I recommend you consult my newly updated book, The Lifeboat Strategy, for the answers. Click here for more information!
Reprinted with permission from The Sovereign Society.
Mark Nestmann is a journalist with more than 20 years of investigative experience and is a charter member of The Sovereign Society's Council of Experts. He has authored over a dozen books and many additional reports on wealth preservation, privacy and offshore investing. Mark serves as president of his own international consulting firm, The Nestmann Group, Ltd. The Nestmann Group provides international wealth preservation services for high-net worth individuals. Mark is an Associate Member of the American Bar Association (member of subcommittee on Foreign Activities of U.S. Taxpayers, Committee on Taxation) and member of the Society of Professional Journalists. In 2005, he was awarded a Masters of Laws (LL.M) degree in international tax law at the Vienna (Austria) University of Economics and Business Administration.