The Elephant in the room: How should we prepare for the collapse of the US?

[sophie]

Actually for my post I was thinking of less drastic ways to avoid the tax than renouncing US citizenship. Keep in mind that you don't need to hide ALL your money, just enough of it to get you below threshold.

There are plenty of options. One available to us PP'ers is easy: buy physical gold and make sure the transactions aren't reportable.

If your primary residence is excluded from the wealth tax then you can simply pay down the mortgage. i.e. the same tactic that seniors use to avoid missing out on Medicaid benefits. There are also options like putting money or assets into a trust.

The biggest problem is going to be small business owners, whose ownership stake will count as wealth. I'm no accountant, but I would think that problem could be solved by incorporating the business.

All these maneuvers will cost money and provide lots of work for accountants, but at least be aware that the wealth tax isn't necessarily going to be a doomsday scenario.

[jalanlong]

https://www.zerohedge.com/personal-fina ... fair-share

This was posted today. It covers some of same topics on this thread.

[Xan]

https://www.zerohedge.com/personal-fina ... fair-share

This was posted today. It covers some of same topics on this thread.

How does everyone think that the Perth Mint fits with the recommendations?

[Hal]

https://www.zerohedge.com/personal-fina ... fair-share

This was posted today. It covers some of same topics on this thread.

How does everyone think that the Perth Mint fits with the recommendations?

https://www.adamseconomics.com/post/wil ... -your-gold

That said, I keep Gold there. Any country can enact such laws.
Probably more important is this interview with Marin Katusa on storage locations.

https://www.youtube.com/watch?v=dJGUhWq7Efk

[Libertarian666]

Actually for my post I was thinking of less drastic ways to avoid the tax than renouncing US citizenship. Keep in mind that you don't need to hide ALL your money, just enough of it to get you below threshold.

There are plenty of options. One available to us PP'ers is easy: buy physical gold and make sure the transactions aren't reportable.

If your primary residence is excluded from the wealth tax then you can simply pay down the mortgage. i.e. the same tactic that seniors use to avoid missing out on Medicaid benefits. There are also options like putting money or assets into a trust.

The biggest problem is going to be small business owners, whose ownership stake will count as wealth. I'm no accountant, but I would think that problem could be solved by incorporating the business.

All these maneuvers will cost money and provide lots of work for accountants, but at least be aware that the wealth tax isn't necessarily going to be a doomsday scenario.

I don't think any of those options will keep you safe if you're still in the US when the balloon goes up.
The second passport is the cornerstone of any serious plan to avoid being caught in the collapse.

[Libertarian666]

Any idea what are the tax implications of dual citizenship? Would you still be subject to U.S. income taxes?

Yes, still subject to US income taxes.

There are some subtle exceptions, though. If you are out of country for more than X months, then Y% of your income, which is earned out of country, is not subject to Federal tax.

In my case, my legal residence is in a USA state with no income tax. But virtually all of my income is from US companies or interest, dividends or capital gains from US companies. So... I suck it up and pay US taxes no matter where I live. Because, honestly, a US passport is the bomb. I can't imagine giving it up.

I imagine the same was true of the German passport before the 1930's.

Anyway, no one here is claiming that you need to give up US citizenship at the moment; you can maintain dual citizenship with most other countries without much difficulty.

It's when the disaster actually occurs that you really need that second passport, but of course it will be too late to acquire it then.

[Mark Leavy]

Any idea what are the tax implications of dual citizenship? Would you still be subject to U.S. income taxes?

Yes, still subject to US income taxes.

There are some subtle exceptions, though. If you are out of country for more than X months, then Y% of your income, which is earned out of country, is not subject to Federal tax.

In my case, my legal residence is in a USA state with no income tax. But virtually all of my income is from US companies or interest, dividends or capital gains from US companies. So... I suck it up and pay US taxes no matter where I live. Because, honestly, a US passport is the bomb. I can't imagine giving it up.

I imagine the same was true of the German passport before the 1930's.

Anyway, no one here is claiming that you need to give up US citizenship at the moment; you can maintain dual citizenship with most other countries without much difficulty.

It's when the disaster actually occurs that you really need that second passport, but of course it will be too late to acquire it then.

No argument there. I fully understand how valuable a second passport would be. Even without a US meltdown, I'd love to have one today. It's a risk/reward tradeoff. The only path I personally have today would involve spending a lot more money or time than I care to give up right now. But, at some point, I might just shell out the cash for a Bulgarian passport or buy a Golden Visa from Portugal. But that is a lot of cash...

[pp4me]

I have a brother in law who has been living in the Philippines for over 10 years, earning money from buying and selling property and he has never even filed with the IRS in all that time. Probably not a good idea if you plan on returning.

Just to follow up on my own post I have to say I consider my brother-in-law's manner of expatriation to be exactly NOT the way to do it. He is now basically country-less. In the Philippines he's an illegal immigrant and will have to pay a hefty fine to exit the country. His U.S. passport also expired long ago and I have no idea how hard it will be to get it renewed after living in a foreign country for 10 years and not even filing U.S. income tax (which I believe you are required to do if you live overseas no matter how much money you make).

We visited the family last year and I got the sense they are now regretting the situation they have gotten themselves into.

[anato]

not even filing U.S. income tax (which I believe you are required to do if you live overseas no matter how much money you make).

I wouldn't bet my house on it, but I vaguely remember that if you make less than 90k$ a year, and are living abroad, you're not required to file.

[Mark Leavy]

not even filing U.S. income tax (which I believe you are required to do if you live overseas no matter how much money you make).

I wouldn't bet my house on it, but I vaguely remember that if you make less than 90k$ a year, and are living abroad, you're not required to file.

You have to be out of the country for more than 10 months and the income has to be earned outside of the USA and you have to file for the exemption.

[Libertarian666]

Any idea what are the tax implications of dual citizenship? Would you still be subject to U.S. income taxes?

Yes, still subject to US income taxes.

There are some subtle exceptions, though. If you are out of country for more than X months, then Y% of your income, which is earned out of country, is not subject to Federal tax.

In my case, my legal residence is in a USA state with no income tax. But virtually all of my income is from US companies or interest, dividends or capital gains from US companies. So... I suck it up and pay US taxes no matter where I live. Because, honestly, a US passport is the bomb. I can't imagine giving it up.

I imagine the same was true of the German passport before the 1930's.

Anyway, no one here is claiming that you need to give up US citizenship at the moment; you can maintain dual citizenship with most other countries without much difficulty.

It's when the disaster actually occurs that you really need that second passport, but of course it will be too late to acquire it then.

No argument there. I fully understand how valuable a second passport would be. Even without a US meltdown, I'd love to have one today. It's a risk/reward tradeoff. The only path I personally have today would involve spending a lot more money or time than I care to give up right now. But, at some point, I might just shell out the cash for a Bulgarian passport or buy a Golden Visa from Portugal. But that is a lot of cash...

Well, the Portugal visa doesn't give you a second passport, at least not until you get citizenship, which is offered after 6 years.
If you are just looking for permanent residency in another country, Uruguay is probably the best bet, at least according to my research a decade ago. At that time they didn't put many roadblocks in the way of permanent residency, and permanent residents get a cedula that allows travel among and within several South American countries.

[glennds]

Any idea what are the tax implications of dual citizenship? Would you still be subject to U.S. income taxes?

Yes, still subject to US income taxes.

There are some subtle exceptions, though. If you are out of country for more than X months, then Y% of your income, which is earned out of country, is not subject to Federal tax.

In my case, my legal residence is in a USA state with no income tax. But virtually all of my income is from US companies or interest, dividends or capital gains from US companies. So... I suck it up and pay US taxes no matter where I live. Because, honestly, a US passport is the bomb. I can't imagine giving it up.

The answer can also depend on whether the non-US country of citizenship (or legal residence) has a tax treaty with the US and what the provisions of that treaty are. You can find the tax treaties on the IRS website. I think there are like 75 or more of them and I don't think any two are alike so the provisions can be highly unique.
Most of the time the treaty is providing some relief or exemption from double taxation on income or gain earned in the non-US country. It gets complicated enough, that I think it may be worth having a professional preparer with experience in this area looking over your shoulder. Ignorance is not a defense if you inadvertently trip a wire that prompts an auditor to allege that you were using the other country to evade or avoid US taxes.

[pp4me]

Fred Reed is less than optimistic about the future.....

https://www.unz.com/freed/its-gonna-blo ... f-it-dont/

[Xan]

Fred Reed is less than optimistic about the future.....

https://www.unz.com/freed/its-gonna-blo ... f-it-dont/

Well that's depressing.

[sweetbthescrivener]

Even if you get a second passport, everyone you know and love is still left behind. Will new life abroad be that rosy with this knowledge?

[pp4me]

Even if you get a second passport, everyone you know and love is still left behind. Will new life abroad be that rosy with this knowledge?

Sometimes you just have to do what you have to do to survive. Think of the South Vietnamese desperately fleeing from the coming onslaught of social justice warriors in Saigon Ho Chi Minh City.

[Libertarian666]

Even if you get a second passport, everyone you know and love is still left behind. Will new life abroad be that rosy with this knowledge?

Maybe they will need a place to go to as well. Even if they can't get a second passport quickly, they might be able to visit and ride out some of the disruption in a safer location.

[Libertarian666]

Even if you get a second passport, everyone you know and love is still left behind. Will new life abroad be that rosy with this knowledge?

Sometimes you just have to do what you have to do to survive. Think of the South Vietnamese desperately fleeing from the coming onslaught of social justice warriors in Saigon Ho Chi Minh City.

Exactly. And I'm sure you recall what they took with them as money to begin a new life abroad...