The Transfer Tax Tale of Disenfranchised U.S. Citizens

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this column focuses on the transfer tax implications affecting people who acquired U.S. citizenship by birth in Puerto Rico, Guam, the U.S. Virgin Islands, or the Northern Mariana Islands, which are referred to here as “the possessions.” And anyone who acquired U.S. citizenship by birth or citizenship in the possessions is referred to in this column as a “citizen” of a possession.
The relationship between the federal transfer tax system and the possessions has been travailed since the estate and gift tax were first introduced by the Revenue Act of 1916.1 Congress and the courts have spent the last 100 years rewriting and reinterpreting the same few keywords in the hope that citizens of possessions would fare no better and no worse than any other U.S. citizen. They have been unsuccessful.


This article was originally published in The Journal of Financial Planning. The full-text article from the publisher can be found here.

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The Journal of Financial Planning