AICPA Comments on Proposed Expat Gift and Bequest Regulations  

Published July 21, 2016

Flags with businessmenThe American Institute of CPAs (AICPA) has submitted comments to the Department of the Treasury and the Internal Revenue Service (IRS) on proposed regulations regarding the taxation of certain gifts and bequests made to United States citizens and residents by covered expatriates. 

The proposed regulations would apply to certain individuals who relinquished United States citizenship or ceased to be lawful permanent residents of the United States on or after June 17, 2008.

The AICPA made 16 recommendations, including the following:

  • Allow marital and charitable deductions for outright distributions from a non-electing foreign trust.
  • Define the date of receipt.
  • Define the value of received property.
  • Allow a covered expatriate to elect to treat a gift as a gift or bequest of a US situs asset.  (“Situs” refers to where the asset is considered to be located for legal purposes.)
  • Eliminate the double taxation on US situs assets.
  • Allow separate accounting for a non-electing foreign trust.
  • Provide a form or certification, documenting whether a donor is a covered expatriate.


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