Pre-Immigration Tax Planning: What to Do Before Moving to the US

Foreign nationals planning to move to the US can take meaningful steps before their arrival that are not available once they become US tax residents. The most significant opportunity is selling appreciated foreign assets before moving: once you become a US resident, gains on all your worldwide assets are subject to US tax, but gains that accrued before you arrived are generally not taxed if you sell before your residency begins. Review your foreign retirement accounts, investment portfolios, and any foreign entities you own, because all of these become reportable and potentially taxable once you enter the US tax system. If you own shares in foreign corporations that will become CFCs once you are a US person, restructuring before arrival can avoid the annual Subpart F and GILTI compliance burden going forward. The Substantial Presence Test can trigger US tax residency before you get a green card, so the timing of your entry date and the number of days you spend in the US in your first years are worth planning around.