The Little Book of the Shrinking Dollar: What You Can Do to Protect Your Money Now

The United States Wants to Keep You as a Milk Cow

Nota bene: The United States isn’t happy about your leaving the states of the Union, and they will make a last grab for your cash. It’s called the exit tax, enacted in 2008. It’s a tax on the capital gains of assets held since you’ve acquired them—as if the sum total is this year’s income.

These assets are taxed “as if those assets are being sold”—even if you have no intention of selling them. However, it does not apply if your net worth is less than $2 million. Work it, if you’re so inclined.

One reader, an expat in Germany, wrote us:

In my case, before expatriating, I had sold a company a couple years before, paid taxes on the gain in that year (15 percent) to Uncle Sam and had only minimal additional gains since then. The exit tax will be on those small gains since I sold the company, not on all the gains from the sale of the company itself (which would, in fact, be double taxation).

If you have a house you bought 20 years ago and it’s appreciated five times even after the recent declines, yes, you would owe long-term capital gains on that house. That could be a problem if you can’t raise the cash for the taxes otherwise or can’t sell the house.

If you are small fry . . . my recommendation is like the Nike ad—“Just do it.” It’s a very liberating experience.