Hello All!
Assuming the following, how exactly would the exit tax work?
DEPART JAPAN: 5-years and 1-day
CITZENSHIP: US
PROPERTY: 250,000 USD
US IRA/401K: 250,000 USD
US BROKERAGE: 250,000 USD
USD/JPN EXCHANGE RATE: 150 JPY to 1 USD
OVERSEAS ASSETS VALUE IN YEN: 112.5 Million JPY
US Tax Payer sold an re-purchased their entire U.S. Brokerage account and realized all long term gains at the 0% U.S. tax bracket 2-days earlier.
Never remitted any of the income to Japan.
How would the Japan exit tax work if all gains in the brokerage account have been realized and "taxed" by the U.S. with an overseas asset value exceeding 100 Million Yen?
by BriefExisting3952
2 comments
Well, real estate isn’t applicable to exit tax so you’d be at $500k and under the threshold.
>PROPERTY: 250,000 USD
>US IRA/401K: 250,000 USD
Real estate doesn’t count for the purposes of the exit tax, as noted elsewhere. It’s unlikely that an IRA/401(k) would count, either.
>How would the Japan exit tax work if all gains in the brokerage account have been realized and “taxed” by the U.S. with an overseas asset value exceeding 100 Million Yen?
Re-purchasing the contents of the brokerage account will reset the cost basis, so the exit tax (if applicable) would require the payment of Japanese income tax on the difference between the value of the assets in the brokerage account on the day you leave Japan and their cost basis (basically, their value when re-purchased them).
This would presumably be a minimal amount. But re-purchasing after you have left Japan would be far simpler.