Conclusion: Building cross-border wealth in a tax efficient manner
Understanding the PFIC rules is essential for U.S. expats, green card holders, and other U.S. taxable persons. Due to the Foreign Account Tax Compliance Act (FATCA), it is becoming increasingly important for U.S. taxpayers to ensure all foreign investments are reported properly. The IRS is receiving more information on foreign accounts owned by U.S. citizens and this may include information about unreported PFICs.
Many foreign financial advisors do not understand that the investments they are selling, likely foreign funds classified as PFICs, can be tax inefficient for an American taxpayer. American citizens living abroad should use U.S. investment funds and work with an American expat financial advisor who is an expert in cross-border matters. Green card holders and foreign nationals should consider selling PFICs they purchased before moving to the United States. Ultimately, this will be the most cost and tax efficient way to build wealth over time for a global family.
Round Table Wealth Management understands these vital cross-border investment issues. Whether you are an American expat, a current green-card holder, or foreign national moving to the United States, contact one of our experienced international financial advisors to review your situation.