Formulaire 8854 Instructions
Instructions pour le formulaire 8854, Déclaration d'expatriation initiale et annuelle
Rév. 2023
Formulaires associés
- Formulaire 8854 - Déclaration d'expatriation initiale et annuelle
Department of the Treasury
Internal Revenue Service
2023
Instructions for Form 8854
Initial and Annual Expatriation Statement
Section references are to the Internal Revenue Code unless
otherwise noted.
long-term resident (LTR), defined below, and terminated your
residency in 2023.
You must file your annual Form 8854 (Parts I and III) if you
expatriated before 2023 and you:
Future Developments
For the latest information about developments related to
Form 8854 and its instructions, such as legislation enacted
1. Deferred the payment of tax,
2. Have an item of eligible deferred compensation, or
3. Are a beneficiary of a nongrantor trust.
What's New
Expatriation. Expatriation includes the acts of relinquishing
U.S. citizenship and terminating long-term residency.
Date of relinquishment of U.S. citizenship. You are
considered to have relinquished your U.S. citizenship (and
consequently, have an expatriation date) on the earliest of the
following dates.
Increase in average annual net income tax liability. The
average annual net income tax liability for the 5 tax years
ending before your expatriation date, which is used to
determine whether an individual is a covered expatriate, has
increased to $190,000. For more information, see Covered
expatriate, later.
1. The date you renounced your U.S. citizenship before a
diplomatic or consular officer of the United States (provided
that the voluntary renouncement was later confirmed by the
issuance of a certificate of loss of nationality).
2. The date you furnished to the State Department a
signed statement of your voluntary relinquishment of a U.S.
nationality confirming the performance of an expatriating act
(provided that the voluntary relinquishment was later
confirmed by the issuance of a certificate of loss of
nationality).
Increase in threshold for net unrealized gain on proper-
ty. For 2023, if you are a covered expatriate, the net gain
that you must otherwise include in your income is reduced by
877A, later.
General Instructions
Purpose of Form
Section 877A applies to U.S. citizens who have relinquished
their citizenship and long-term residents who have ended
their residency (expatriated) on or after June 17, 2008.
3. The date the State Department issued a certificate of
loss of nationality.
4. The date a U.S. court canceled your certificate of
naturalization.
Form 8854 is used by expatriates to certify compliance
with tax obligations in the 5 years before expatriation and to
comply with their initial and annual information reporting
obligations under section 6039G.
Long-term resident (LTR) defined. You are an LTR if you
were a lawful permanent resident of the United States in at
least 8 of the last 15 tax years ending with the year you are
no longer treated as a lawful permanent resident. In
determining if you meet the 8-year requirement, don't count
any year if in that year you were treated as a resident of a
foreign country under a tax treaty and did not waive treaty
benefits applicable to residents of that country.
Lawful permanent resident. You are a lawful permanent
resident of the United States if you have been given the
privilege, according to U.S. immigration laws, of residing
permanently in the United States as an immigrant. You
generally have this status if you have been issued an alien
registration card, also known as a green card, and your green
card hasn't been revoked or judicially or administratively
determined to have been abandoned. However, you are also
no longer treated as a lawful permanent resident if you (1)
commenced to be treated as a resident of a foreign country
under the provisions of a tax treaty, (2) did not waive the
benefits of such treaty, and (3) notified the IRS of the
commencement of such treatment. See Regulations section
301.7701(b)-7 for information on related filing requirements.
Date of termination of long-term residency. If you were
an LTR, you terminated your lawful permanent residency
(and consequently, have an expatriation date) on the earliest
of the following dates.
Note. Individuals who expatriated for immigration purposes
after June 3, 2004, and before June 17, 2008, but who have
not previously filed a Form 8854, continue to be treated as
U.S. citizens or U.S. lawful permanent residents for U.S.
income tax purposes until they file a Form 8854. See section
7701(n), as in effect before June 17, 2008.
Individuals in this category are subject to section 877 once
they file the Form 8854. These individuals should use the
modify the year on the form by crossing out 2018 and
entering the year of actual filing) for purposes of filing their
initial and/or annual expatriation statements pursuant to
section 877 going forward.
Individuals who expatriated before June 17, 2008, who
have previously filed a Form 8854, but who still have an
annual reporting requirement in 2023 under section 877,
should also use the 2018 Form 8854 but modify the year on
the form by crossing out 2018 and entering 2023.
Who Must File
You must file your initial Form 8854 (Parts I and II) if you
relinquished your U.S. citizenship in 2023 or you are a
Aug 10, 2023
Cat. No. 24874E
1. The date you voluntarily abandoned your lawful
permanent resident status by filing Department of Homeland
Security Form I-407 with a U.S. consular or immigration
officer.
2. The date you became subject to a final administrative
order that you abandoned your lawful permanent resident
status (or, if such order has been appealed, the date of a final
judicial order issued in connection with such administrative
order).
3. The date you became subject to a final administrative
or judicial order for your removal from the United States
under the Immigration and Nationality Act.
4. If you were a dual resident of the United States and a
country with which the United States has an income tax
treaty, the date on which you commenced to be treated as a
resident of that country under the treaty, did not waive the
benefits of the treaty, and gave notice to the IRS of the
commencement of such treatment. See Regulations section
301.7701(b)-7 for information on related filing requirements.
your U.S. income tax and reporting requirements in order to
avoid being treated as a covered expatriate under section
877A, you may qualify for certain relief procedures. See
Penalties. If you are subject to section 877A and required to
file Form 8854 for any tax year, and you fail to file or do not
include all the information required by the form, or the form
includes incorrect information, you will owe a penalty of
$10,000 for that year, unless it is shown that such failure is
due to reasonable cause and not willful neglect.
Taxation Under Section 877A
If you are a covered expatriate in the year you expatriate, you
are subject to income tax on the net unrealized gain in your
property as if the property had been sold for its fair market
value (FMV) on the day before your expatriation date
(“mark-to-market tax”). This applies to most types of property
interests you held on the date of your expatriation. But see
Exceptions, later.
Covered expatriate. You are a covered expatriate if you
expatriated after June 16, 2008, and any of the following
statements apply.
1. Your average annual net income tax liability for the 5
tax years ending before the date of expatriation is more than
$190,000.
Gains from deemed sales are taken into account without
regard to other rules under the Code. Losses from deemed
sales are taken into account to the extent otherwise allowed
under the Code. However, section 1091 (relating to the
disallowance of losses on wash sales of stock and securities)
doesn't apply. For 2023, the net gain that you must otherwise
include in your income is reduced (but not below zero) by
$821,000.
2. Your net worth was $2 million or more on the date of
your expatriation.
3. You fail to certify on Form 8854 that you have complied
with all federal tax obligations for the 5 tax years preceding
the date of your expatriation.
Exceptions. The mark-to-market tax does not apply to the
following.
1. Eligible deferred compensation items.
2. Ineligible deferred compensation items.
3. Specified tax deferred accounts.
4. Interests in nongrantor trusts.
Exception for dual-citizens and certain minors.
Dual-citizens and certain minors (defined next) won't be
treated as covered expatriates (and therefore won't be
subject to the expatriation tax) solely because one or both of
the statements in paragraph (1) or (2) under Covered
expatriate, earlier, applies. However, these individuals will still
be treated as covered expatriates unless they file Form 8854
and certify that they have complied with all federal tax
obligations for the 5 tax years preceding the date of
expatriation as required in paragraph (3) (under Covered
expatriate, earlier).
Instead, item (1) is subject to withholding provided that
you (i) properly make an irrevocable waiver on your initial
filing of this form of any right to claim any reduction in
withholding under an applicable treaty between the United
II, Section C, later); and (ii) timely notify the payor on Form
W-8CE. To timely notify the payor on Form W-8CE, you must
file the Form W-8CE with the payor on the earlier of:
Certain dual-citizens. You can qualify for the exception
described above if you meet both of the following
requirements.
The day before the first distribution on or after your
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expatriation date, or
You became at birth a U.S. citizen and a citizen of another
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30 days after your expatriation date.
In the case of item (2), you are treated as receiving the
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country and, as of your expatriation date, you continue to be
a citizen of, and are taxed as a resident of, that other country.
present value of your accrued benefit as of the day before
your expatriation date and you should include this amount on
your Form 1040 or 1040-SR for the year that includes your
expatriation date. In the case of item (3), you are treated as
receiving a distribution of your entire interest in the account
on the day before your expatriation date and you should
include this amount on your Form 1040 or 1040-SR for the
year that includes your expatriation date. See paragraphs (d),
(e), and (f) of section 877A.
You were a resident of the United States for not more than
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10 years during the 15-tax-year period ending with the tax
year during which you expatriated. For the purpose of
determining U.S. residency, use the substantial presence test
described in chapter 1 of Pub. 519.
Certain minors. You can qualify for the exception
described above if you meet both of the following
requirements.
You expatriated before you were 181/2.
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Item (4) is subject to withholding, and you are treated as
having waived any right to claim any reduction in withholding
under an applicable treaty between the United States and
your country of residence, unless you elect to be treated as
having received the value of your entire interest in the trust by
obtaining a ruling from the IRS to that effect. See Section C
under Part II, later.
You were a resident of the United States for not more than
•
10 tax years before you expatriated. For the purpose of
determining U.S. residency, use the substantial presence test
described in chapter 1 of Pub. 519.
Note. If you have relinquished or intend to relinquish your
U.S. citizenship, and you wish to come into compliance with
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Instructions for Form 8854 (2023)
3. If you elected to defer the payment of any tax due, see
the instructions under Part II, Section D, Line 5, later, and
send your tax deferral agreement request to the address
listed below.
Deferral of the payment of mark-to-market tax. You can
make an irrevocable election to defer the payment of the
mark-to-market tax imposed on the deemed sale of property.
If you make this election, the following rules apply.
1. You make the election on a property-by-property basis.
Internal Revenue Service
3651 S IH35
2. The deferred tax on a particular property is due on the
return for the tax year in which you dispose of the property.
MS 4301AUSC
Austin, TX 78741
3. Interest is charged for the period the tax is deferred.
4. The due date for the payment of the deferred tax
Note. If you were a U.S. person for any portion of 2023, you
may be required to file Financial Crimes Enforcement
Network (FinCEN) Form 114, Report of Foreign Bank and
Financial Accounts (FBAR). In addition, you may be required
to file Form 8938, Statement of Specified Foreign Financial
cannot be extended beyond the earlier of the following dates.
a. The due date of the return required for the year of
death.
b. The time that the security provided for the property
fails to be adequate. See item (6) below.
6. You must provide adequate security (such as a bond).
7. You must make an irrevocable waiver of any right
under any treaty of the United States that would preclude
assessment or collection of any tax imposed by section
877A.
Specific Instructions
Identifying number. Generally, this number is your U.S.
social security number. If you were never issued a social
security number, attach a statement explaining the reason.
Part I—General Information
When To File
This section is to be completed by all filers.
Attach your initial Form 8854 to your income tax return (Form
1040, 1040-SR, or 1040-NR) for the year that includes your
expatriation date, and file your return by the due date of your
tax return (including extensions). Also send a copy of your
File, later. If you are not required to file an income tax return,
later, by the date your Form 1040-NR (or Form 1040 or
1040-SR) would have been due (including extensions) if you
had been required to file. (See Resident Alien or Nonresident
Alien in the Instructions for Form 1040-NR.)
Line 1
If you have a P.O. box, enter your box number instead of your
street address only if your post office does not deliver mail to
the street address.
Line 2
Enter the information in the following order: street address,
city, province or state, and country. Follow the country's
practice for entering the postal code. Don't abbreviate the
country name.
File your annual Form 8854 if you expatriated before 2023
and you:
Line 3
Enter the country of which you are considered a resident for
tax purposes if it is different from the country in which your
principal foreign residence is located.
1. Deferred the payment of tax on any property on a Form
8854 filed in a previous year,
2. Reported an eligible deferred compensation item on a
Form 8854 filed in a previous year, or
Line 4
3. Reported an interest in a nongrantor trust on a Form
Check the appropriate box to indicate whether you
expatriated in 2023 and are filing your initial expatriation
statement, or if you expatriated before 2023 (but after June
16, 2008) and are filing an annual statement.
8854 filed in a previous year.
For each year that you are required to file a Form 1040-NR
(or Form 1040 or 1040-SR), attach your annual Form 8854 to
your Form 1040-NR (or Form 1040 or 1040-SR) and send a
later. For each year that you are not required to file Form
1040-NR (or Form 1040 or 1040-SR), send your Form 8854
Form 1040-NR (or Form 1040 or 1040-SR) would have been
due (including extensions) if you had been required to file a
Form 1040-NR (or Form 1040 or 1040-SR).
Line 5
Your expatriation date is the date you relinquish citizenship
(in the case of a former citizen) or terminate your long-term
residency (in the case of a former U.S. resident). See Date of
long-term residency, earlier.
Line 6
List all countries (including the United States) of which you
are a citizen and the date, including by birth, on which you
became a citizen.
Where To File
1. Send your original initial or annual Form 8854 to the
Line 7
address listed below.
If you are a former U.S. citizen, check the appropriate box to
indicate how you became a U.S. citizen.
2. If you are required to attach the original Form 8854 to a
Form 1040-NR, 1040, or 1040-SR, send a copy of your initial
or annual Form 8854, marked “Copy,” to the address listed
below.
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Instructions for Form 8854 (2023)
information returns, if applicable, and your obligation to pay
all relevant tax liabilities, interest, and penalties.
Line 8a
If you are or were a U.S. lawful permanent resident, enter the
date on which you became a U.S. lawful permanent resident.
This is the date you were issued your green card.
You will be subject to tax under section 877A if you
have not certified your compliance with these
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CAUTION
obligations, regardless of whether your average
Line 8b
Enter the date you either:
annual income tax liability or net worth exceeds the
applicable threshold amounts.
1. Became subject to a final administrative order that you
abandoned your lawful permanent resident status (or, if such
order has been appealed, the date of a final judicial order
issued in connection with such administrative order); or
2. Became subject to a final administrative or judicial
order for your removal from the United States under the
Immigration and Nationality Act.
Section B—Balance Sheet
The financial information in this balance sheet is required
under section 6039G. The balance sheet can be used to
arrive at your net worth.
For purposes of determining your net worth, you are
considered to own any interest in property that would be
taxable as a gift under chapter 12 of subtitle B of the Code
had you transferred it immediately prior to expatriation, but
without regard to sections 2503(b) through (g), 2513, 2522,
2523, and 2524. To determine the value of your interests in
property, use the valuation principles of section 2512 and the
regulations thereunder.
Line 8c
Enter the date you voluntarily abandoned your lawful
permanent resident status by filing Department of Homeland
Security Form I-407 with a U.S. consular or immigration
officer.
Part II—Initial Expatriation Statement
for Persons Who Expatriated in 2023
Section A—Expatriation Information
This section must be completed by all individuals who
expatriated in 2023.
Note. If there have been significant changes in your assets
and liabilities for the period that began 5 years before your
expatriation and ended on the date that you first filed Form
8854, you must attach a statement explaining the changes.
Columns (a) and (b)
List in U.S. dollars the FMV (column (a)) and the U.S.
adjusted basis (column (b)) of your assets and liabilities as of
your expatriation date.
Line 1
For each of the 5 tax years ending before the date of your
expatriation, determine your total tax less any foreign tax
credit. For 2022, use the amount shown on the 2022 Form
1040, line 24, less any amount reported on Schedule 3 (Form
1040), line 1.
You can use good faith estimates of FMV and basis.
Formal appraisals are not required.
Line 5a
Line 2
List the appropriate amount in each column for all
nonmarketable stock and securities issued by foreign
corporations that would be controlled foreign corporations if
you were still a U.S. citizen or resident. Note that these
amounts are already included on line 5. Don't include
amounts on this line in the total on line 20.
You can use the Part II, Section B, balance sheet to
determine your net worth.
Line 3
Check the “Yes” box if you became at birth a U.S. citizen and
a citizen of another country and, as of your expatriation
date, you continue to be a citizen of, and are taxed as a
resident of, that other country.
Line 6
List in U.S. dollars the present value of your U.S. and foreign
pensions or similar retirement arrangements as of your
expatriation date.
Line 5
Line 7
Check the “Yes” box if:
You expatriated before you were 181/2, and
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List in U.S. dollars the present value of your deferred
compensation, including any stock options, as of your
expatriation date. The present value should include all
deferred compensation, regardless of where you performed
services.
You have been a resident of the United States for not more
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than 10 tax years before you expatriated. For the purpose of
determining U.S. residency, use the substantial presence test
described in chapter 1 of Pub. 519.
Line 6
Line 8
Check the “Yes” box if you have complied with your tax
obligations for the 5 tax years ending before the date on
which you expatriated, including but not limited to, your
obligations to file income tax, employment tax, gift tax, and
List the total value of all your partnership interests. If you hold
an interest in one or more partnerships, you must attach a
statement to Form 8854 that lists each partnership
separately. Include the employer identification number (EIN),
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Instructions for Form 8854 (2023)
if any, for each partnership. Describe the assets and liabilities
(using the categories on this balance sheet) from your
interest in each partnership.
Section C—Property Owned on Date of
Expatriation
Complete Section C only if you are a covered expatriate (see
Covered expatriate, earlier). If you need additional space for
the description of property, or if you need additional entry
lines, attach a statement.
Line 9
For purposes of determining your net worth, you are
considered to own assets held in trusts that would be subject
to U.S. gift tax if you had transferred your interests in the
trusts by gift immediately before your expatriation date, but
without regard to sections 2503(b) through (g), 2513, 2522,
2523, and 2524. List the total FMV and basis of such
property on line 9. Attach a statement to Form 8854
describing each asset. Include the EIN (if any) for the trust in
which the asset is held.
Line 1
None of the amounts checked on line 1 are subject to the
mark-to-market tax. Don't include them on line 2. Instead,
you must attach a statement to the form that separately
identifies each amount checked on line 1 as of the day before
your expatriation date.
Some of these amounts may otherwise be taxable or
subject to income tax withholding at source. You
must provide Form W-8CE to the payor of the
TIP
Line 10
relevant items. See paragraphs (d), (e), and (f) of section
877A for more information.
List the total value of all of your beneficial interests in trusts to
the extent not included on line 9. You must attach a statement
to Form 8854 that lists each trust separately. Include the EIN
(if any) for each trust. Describe the assets and liabilities
(using the categories on this balance sheet) from your
interest in each trust of which you have a beneficial interest.
Line 1a. Generally, a deferred compensation item is one of
the following.
1. Any interest in a plan or arrangement described in
section 219(g)(5). This includes a qualified pension,
profit-sharing (including 401(k)), annuity, SEP, and SIMPLE
plan.
Note. To determine the value of your beneficial interest, use
the two-step process described in section III of Notice 97-19
which is on page 40 of Internal Revenue Bulletin 1997-10 at
2. Any interest in a foreign pension plan or similar
retirement arrangement or program.
3. Any item of deferred compensation, whether or not
substantially vested. This is any amount of compensation if,
under the terms of the plan, contract, or other arrangement
providing for such compensation, the following conditions
were met.
Lines 11 and 12
Intangible property includes any of the following items that
have substantial value independent of the services of any
individual.
a. You had a legally binding right on your expatriation
Patent, invention, formula, process, design, pattern, or
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date to such compensation.
know-how.
Copyright, literary, musical, or artistic composition.
Trademark, trade name, or brand name.
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•
•
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b. The compensation has not been actually or
constructively received on or before your expatriation date.
Franchise, license, or contract.
c. The compensation is payable on or after your
Method, program, system, procedure, campaign, survey,
expatriation date.
study, forecast, estimate, customer list, or technical data.
Examples of items of deferred compensation include a
cash-settled stock appreciation right, a phantom stock
arrangement, a cash-settled restricted stock unit, an
unfunded and unsecured promise to pay money or other
compensation in the future (other than such a promise to
transfer property in the future), and an interest in a trust
described in section 402(b)(1) or (4) (commonly referred to
as a “secular trust”).
Any similar item.
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Line 19
Attach a statement describing and listing the total value of
any other assets you have that aren't included on lines 1
through 18.
4. Any property, or right to property, that you are entitled
to receive in connection with the performance of services
(whether or not such property or right to property is
substantially vested) to the extent not previously taken into
account under section 83 or in accordance with section 83.
Examples of these items include, but are not limited to,
restricted stock, stock-settled stock appreciation rights, and
stock-settled restricted stock units.
Line 20
Combine lines 1 through 5 and 6 through 19, not including
any amounts on line 5a. The amounts on line 5a are included
in determining the amounts on line 5.
Line 23
Attach a statement describing and listing the total value of
any other liabilities you have that aren't included on lines 21
and 22.
Note. A deferred compensation item does not include the
portion of an item that is attributable to services performed
outside the United States while you were not a citizen or
resident of the United States. For more information, see
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Instructions for Form 8854 (2023)
Eligible deferred compensation item means any deferred
compensation item with respect to which:
owner under sections 671 through 679 on the day before
your expatriation date. You are considered a beneficiary of
such trust if:
1. You are entitled or permitted, under the terms of the
trust instrument or applicable local law, to receive a direct or
indirect distribution of trust income or corpus (including, for
example, a distribution in discharge of an obligation);
The payor is either a U.S. person or a non-U.S. person who
•
elects to be treated as a U.S. person for purposes of section
877A(d)(1),
The covered expatriate notifies the payor of their status as
•
a covered expatriate on Form W-8CE, and
The covered expatriate irrevocably waives any right to
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2. You have the power to apply trust income or corpus for
claim any withholding reduction on such item under any
your own benefit; or
treaty with the United States on Form 8854.
3. You could be paid from the trust income or corpus if
the trust or the current interests in the trust were terminated.
The Secretary may provide separate guidance providing a
procedure for a payor who is a non-U.S. person and wishes
to elect to be treated as a U.S. person for purposes of section
877A(d)(1).
Unless you elect to be treated as having received the
value of your interest in the trust, as determined for purposes
of section 877A, as of the day before your expatriation date,
you cannot claim a reduction in withholding on any
distribution from the trust under any treaty with the United
States. Before you can make the election, you must get a
letter ruling from the IRS as to the value, if ascertainable, of
your interest in the trust as of the day before your expatriation
date by following the procedures set forth in Rev. Proc.
2020-1, 2020-1 I.R.B. 1, available at IRS.gov/irb/
You must file Form 8854 annually to certify that no
distributions have been received from your eligible
!
CAUTION
deferred compensation item(s) or to report the
distributions you received.
Note. If you have one or more eligible deferred
compensation items, you must attach a statement to the form
that separately identifies each eligible deferred
checking the box under line 1d of this form and attaching a
copy of the letter ruling both to this form and to your timely
filed tax return (including extensions) for the 2023 tax year.
Until you obtain the valuation letter ruling and provide a copy
of such letter ruling to the trustee of the nongrantor trust
together with certification, under penalties of perjury, that you
have paid all tax due as a result of your election, any taxable
distributions that you receive from the trust will be subject to
30% withholding.
compensation item and includes the following language for
each item: “I irrevocably waive any right to claim any
reduction in withholding for this eligible deferred
compensation item under any treaty with the United States.”
Line 1b. Ineligible deferred compensation item means any
deferred compensation item that is not an eligible deferred
compensation item. The amount of this deferred
compensation item (the present value of the accrued benefit)
must be included on your Form 1040 or 1040-SR, or other
schedule, for the portion of your tax year that includes your
expatriation date. For more information, see section 5D of
Notice 2009-85, 2009-45 I.R.B. 598, available at IRS.gov/irb/
If you are a beneficiary of a nongrantor trust, you
must file Form 8854 annually to certify that no
!
CAUTION
distributions have been received or to report the
distributions you received.
Note. If you have one or more ineligible deferred
compensation items, you must attach a statement to the form
that separately identifies each ineligible deferred
compensation item and provides the present value of such
ineligible deferred compensation item as of the day before
your expatriation date.
Note. If you are a beneficiary of one or more nongrantor
trusts, you must attach a statement to the form that
separately identifies each trust and includes one of the
following statements for each trust.
1. “I waive any right to claim any reduction in withholding
on any distribution from such trust under any treaty with the
United States.”
2. “I elect under section 877A(f)(4)(B) to be treated as
having received the value of my entire interest in the trust (as
determined for purposes of section 877A) as of the day
before my expatriation date. I attach a copy of my valuation
letter ruling issued by the IRS.”
Line 1c. A specified tax deferred account includes:
1. An individual retirement plan (except those described
in section 408(k) or 408(p)),
2. A Coverdell education savings account, or
3. A health savings account or an Archer medical savings
account.
The amount of your entire interest in your specified tax
deferred account on the day before your expatriation date
must be included on your Form 1040 or 1040-SR, or other
schedule, for the portion of your tax year that includes your
expatriation date. For more information, see section 6 of
Notice 2009-85, 2009-45 I.R.B. 598, available at IRS.gov/irb/
Line 2
Column (a). An interest in property includes money or other
property, regardless of whether it produces any income or
gain. In addition, an interest in the right to use property will be
treated as an interest in such property. However, do not list
the following.
1. Deferred compensation items.
2. Specified tax deferred accounts.
3. Interests in nongrantor trusts.
Note. If you have one or more specified tax deferred
accounts, you must attach a statement to the form that
separately identifies each specified tax deferred account and
provides the entire account balance of each specified tax
deferred account on the day before your expatriation date.
You are considered to own any interest in property that
would be included in your gross estate for federal estate tax
purposes under chapter 11 of subtitle B of the Code if you
Line 1d. A nongrantor trust is the part of any trust, whether
domestic or foreign, of which you were not considered the
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Instructions for Form 8854 (2023)
died on the day before your expatriation date as a citizen or
resident of the United States. Whether property would be
included in your gross estate will be determined without
regard to sections 2010 through 2016. For this purpose, you
are considered to own your beneficial interest(s) in each trust
(or part of a trust), other than a nongrantor trust subject to
section 877A(f), that would not be included in your gross
estate as described in the preceding sentences. Your
beneficial interest(s) in such a trust shall be determined
under the special rules set forth in section III of Notice 97-19,
which is on page 40 of Internal Revenue Bulletin 1997-10 at
Column (b). Use the FMV on the day before your
expatriation date. FMV is the price at which the property
would change hands between a buyer and a seller when both
have reasonable knowledge of all the necessary facts and
neither has to buy or sell. If parties with adverse interests
place a value on property in an arm's-length transaction, that
is strong evidence of the FMV.
Basis
200,000
800,000
800,000
FMV
2,000,000
1,000,000
500,000
Built-in Gain/Loss
Asset A
Asset B
Asset C
1,800,000
200,000
(300,000)
Step 2: Allocate the exclusion amount to each of the gain
properties by multiplying the exclusion amount ($821,000) by
a ratio of the deemed gain attributable to each gain property
over the total gain of all the gain properties deemed sold.
Asset A
1,800,000
× 821,000 = 738,900
2,000,000
Asset B
200,000
Column (c). Generally, the cost or other basis in this column
cannot be less than the FMV of the property on the date you
first became a U.S. resident. However, if you are a naturalized
citizen or an LTR at the time you expatriated, you can make
an irrevocable election under section 877A(h)(2) to
× 821,000 = 82,100
2,000,000
Step 3: Figure the final amount of deemed gain on each
asset by subtracting the exclusion amount allocated to each
asset.
determine basis without regard to this restriction. Print “(h)
(2)” after any entry for which you make this election.
Column (e). Before you complete column (e), you must
allocate the exclusion amount to the gain properties on a
separate schedule. Attach a copy of the separate schedule to
this form. To allocate the exclusion amount, determine the
gain of each gain property listed in column (a) and enter that
gain in column (d). If the total gain of all the gain properties
exceeds the exclusion amount ($821,000 for 2023), then
allocate the entire exclusion amount to the gain properties by
multiplying the exclusion amount by the ratio of the gain
determined for each gain property in column (d) over the total
gain of all gain properties listed in column (d). After you have
allocated the exclusion amount to the gain properties,
subtract the exclusion amount allocated to each gain
property from the gain reported for that property in column
(d), and enter the resulting amount of gain in column (e). If
the total gain of the gain properties in column (d) is less than
the exclusion amount (but greater than -0-), then you must
use the total gain amount as the exclusion amount, and you
must allocate the exclusion amount, as adjusted, to the gain
properties under the method described above. The exclusion
amount allocated to each gain property cannot exceed the
amount of that gain property's built-in gain.
Asset A:
Asset B:
1,800,000 − 738,900 = 1,061,100
200,000 − 82,100 = 117,900
Column (f). Complete this column in order to list the
schedule or form on which you reported the deemed sale of
each property listed in column (a) (for example, Form 4797 or
Form 8949).
Column (g). Complete this column only for those properties
for which you are electing to defer the payment of tax. First,
complete Section D to line 4. On a separate attachment,
allocate the amount of tax eligible for deferral among all gain
properties listed on line 2. The tax attributable to a particular
property is determined by multiplying the amount on
Section D, line 4, by the ratio of the gain for that property
entered in line 2, column (e), over the total amount of gain of
all gain properties in line 4, column (e). In line 2, column (g),
enter the tax attributable to each property for which you are
electing to defer tax. Then, enter the total deferred tax for
those properties from line 4, column (g), on Section D, line 5.
Example. Line 2 lists four assets, each resulting in a
deemed gain in column (d). The amount of tax eligible for
deferral on Section D, line 4, is $575,000. You must go back
to line 2, column (g), to allocate the deferred tax among the
individual properties.
Example. Xavier, a covered expatriate, renounced his
citizenship on Date 2. On Date 1, the day before Xavier's
renunciation of his citizenship, he owned three assets, which
he had owned for more than 1 year. Asset A is business
property and Assets B and C are personal property. As of
Date 1, Asset A had an FMV of $2,000,000 and a basis of
$200,000; Asset B had an FMV of $1,000,000 and a basis of
$800,000; and Asset C had an FMV of $500,000 and a basis
of $800,000. Xavier must allocate the exclusion amount as
follows.
You must attach a computation to show how you
figured the tax attributable to each property.
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CAUTION
more information on deferring the payment of tax.
Note. The address listed in section 3E of Notice 2009-85 for
mailing your tax deferral agreement is no longer valid. See
later, for the correct address.
Step 1: Determine the built-in gain or loss of each asset by
subtracting the basis from the FMV of the asset on Date 1.
Reporting gain or loss. You must report and recognize the
gain (or loss) of each property reported in Section C, line 2,
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Instructions for Form 8854 (2023)
column (a), on the relevant form or schedule of your Form
1040 or 1040-SR for the part of the year that includes the day
before your expatriation date. The return to which you attach
your form or schedule will depend on your status at the end of
the year. See chapter 1 of Pub. 519 to determine which form
you should file. The gain from column (e) or loss from column
(d) attributable to each property is reported in the same
manner as if the property had actually been sold. For
example, gain recognized from the deemed sale of a rental
property that has been depreciated is reported on Form 4797
as if it had been sold. Gain recognized from the deemed sale
of personal property (such as stock or a personal residence)
is reported on Form 8949 as if it had been sold. Capital gain
retains its character as capital gain; ordinary gain retains its
character as ordinary income.
1. A bond that is furnished to, and accepted by, the IRS,
that is conditioned on the payment of tax (and interest
thereon), and that meets the requirements of section 6325; or
2. Another form of security (including letters of credit) that
is acceptable to the IRS.
You must contact the following office in order to make the
appropriate arrangements for providing security.
Internal Revenue Service
SBSE Advisory Office
7850 SW 6th Court
Mail Stop 5780
Plantation, FL 33324-3202
Telephone: 954-991-4455
You must send your original tax deferral agreement
request, marked “Original,” with your Form 8854 for the year
that includes your expatriation date to:
Section D—Deferral of Tax
If you expatriated in 2023, and you chose to enter into a tax
deferral agreement with the IRS with respect to assets
subject to the mark-to-market rules of section 877A, use lines
2 through 5 of Section D to figure the amount of tax you can
defer. Before completing lines 2 through 5 of Section D, you
must fill out two hypothetical individual income tax returns
using Form 1040 or 1040-SR. The first return includes all
income, including the section 877A(a) gain and loss. The
second return includes all income except the section 877A(a)
gain and loss. Attach both hypothetical returns to this Form
8854.
Internal Revenue Service
3651 S IH35
MS 4301AUSC
Austin, TX 78741
If you are required to file a Form 1040, 1040-SR, or
1040-NR for the year that includes your expatriation date,
also attach a copy of the tax deferral agreement request,
marked “Copy,” to the Form 8854 that you include with your
tax return.
Line 1
Note. The address listed in section 3E of Notice 2009-85 is
If you aren't electing to defer the payment of tax on the gain
reported in Section C, line 2, column (e), report on the
appropriate income tax return schedule or form the gain
amount attributable to each particular property as listed in
Section C, line 2, column (e), and report the loss amount
attributable to each particular property as listed in Section C,
line 2, column (d).
no longer valid.
If the IRS deems your collateral sufficient, and agrees to
enter into a tax deferral agreement, you can pay any tax
deferred, together with interest, at any time. However, the
time for the payment of tax attributable to a particular deferral
asset can be extended only until (a) the year the asset is
ultimately disposed of, or (b) the year of death.
You must file Form 8854 annually for years up to and
If you are electing to defer tax, go to line 2.
including the year in which the full amount of deferred
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CAUTION
tax and interest is paid.
Line 2
Waiver of treaty benefits. As a further condition to
making the election to defer the payment of tax on a
particular asset, you must waive any right under any U.S. tax
treaty that would preclude the assessment or collection of the
tax.
Satisfying your deferred tax liability. If you entered into
an agreement for the deferral of tax with the IRS Advisory
Office and dispose of one or more assets for which you
elected to defer tax, you must contact that office to make
arrangements to satisfy your tax liability. The address for the
Advisory Office is shown above.
Enter on line 2 the amount of tax on line 24 of the first return,
which includes all income, including the section 877A(a) gain
and loss.
Line 3
Enter on line 3 the amount of tax on line 24 of the second
return, which includes all income except the section 877A(a)
gain and loss.
Line 5
Part III—Annual Expatriation
Statement for Persons Who
This is the amount of tax you elect to defer. If you are
deferring tax on all properties, enter the amount from line 4. If
you are electing deferral on only certain properties, go to
Section C, line 2, column (g), to show how much deferred tax
is allocated to each property. Attach a computation.
Procedure for requesting a deferral of the payment of
tax. In order to defer any part of the mark-to-market tax, you
must enter into a tax deferral agreement with the IRS and
agreement (Appendix A). Adequate security can be either:
Expatriated Before 2023
You must file Part III if you:
1. Deferred the payment of tax on any property on a Form
8854 filed in a previous year,
2. Reported an eligible deferred compensation item on a
Form 8854 filed in a previous year, or
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Instructions for Form 8854 (2023)
3. Reported an interest in a nongrantor trust on a Form
8854 filed in a previous year.
distributions of property (including money) from a nongrantor
trust in 2023. Enter the part of the distribution that you would
include in gross income if you continued to be subject to tax
as a U.S. citizen or resident. Also enter the total amount of
tax withheld by the payor(s) of any distribution.
Line 1
If you deferred the payment of tax in an earlier year, refer to
the Form 8854 you filed for that earlier year to complete
columns (a), (b), and (c). If you expatriated in 2019 or later,
use the information from Part II, Section C, line 2. If you
expatriated in 2018 or earlier, use the information from Part
III, line 1, of the earlier year's Form 8854.
Don't include any distribution from a trust if your
interest in the trust was treated in an earlier year as a
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CAUTION
deferred compensation item or part of a specified tax
deferred account.
Exception. Don't check the “Yes” box if you elected on a
previously filed Form 8854 to be treated as having received
the value of your entire interest in the trust as of the day
before your expatriation date.
If you disposed of any property in 2023 on which you
deferred the payment of tax on a previous return, also
complete column (d). You must report the gain or loss from
the property disposed of on the appropriate line (or schedule)
of your income tax return.
Signature
You must pay the deferred tax, plus interest, on any
Form 8854 is not considered valid unless you sign it. If you
have someone else prepare Form 8854, you are still
responsible for its correctness.
property you disposed of, no later than the due date
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CAUTION
(without extensions) of your 2023 income tax return.
Paid preparers. Generally, anyone you pay to prepare Form
8854 must sign it and include a preparer tax identification
number (PTIN) in the space provided. The preparer must
give you a copy for your records. Someone who prepares
Form 8854 but does not charge you a fee should not sign it.
information on arranging payment.
Notice 2009-85 for more information on deferring the tax.
Note. The address listed in section 3E of Notice 2009-85 for
mailing your tax deferral agreement is no longer valid. See
under Section D, earlier, for the correct address.
Paperwork Reduction Act Notice. We ask for the
information on this form to carry out the Internal Revenue
laws of the United States. You are required to give us the
information. We need it to ensure that you are complying with
these laws and to allow us to figure and collect the right
amount of tax.
Line 2
Check the “Yes” box if you received any distributions of
eligible deferred compensation items in 2023. Enter the part
of the distribution that you would include in gross income if
you continued to be subject to tax as a U.S. citizen or
resident. Also enter the total amount of tax withheld by the
payor(s) of any eligible deferred compensation items.
You are not required to provide the information requested
on a form that is subject to the Paperwork Reduction Act
unless the form displays a valid OMB control number. Books
or records relating to a form or its instructions must be
retained as long as their contents may become material in the
administration of any Internal Revenue law. Generally, tax
returns and return information are confidential, as required by
section 6103.
Don't enter the part of any payment that is
attributable to services performed outside the United
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CAUTION
States before or after your expatriation date while you
weren't a citizen or resident of the United States.
The average time and expenses required to complete and
file this form will vary depending on individual circumstances.
For the estimated averages, see the instructions for your
income tax return.
Line 3
Unless the exception at the end of this section applies, check
the “Yes” box if you received any direct or indirect
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Instructions for Form 8854 (2023)