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Sec. 877. Expatriation To Avoid Tax

I.R.C. § 877(a) Treatment Of Expatriates
I.R.C. § 877(a)(1) In General
Every nonresident alien individual to whom this section applies and who, within the 10-year period immediately preceding the close of the taxable year, lost United States citizenship shall be taxable for such taxable year in the manner provided in subsection (b) if the tax imposed pursuant to such subsection (after any reduction in such tax under the last sentence of such subsection) exceeds the tax which, without regard to this section, is imposed pursuant to section 871.
I.R.C. § 877(a)(2) Individuals Subject To This Section
This section shall apply to any individual if—
I.R.C. § 877(a)(2)(A)
the average annual net income tax (as defined in section 38(c)(1)) of such individual for the period of 5 taxable years ending before the date of the loss of United States citizenship is greater than $124,000,
I.R.C. § 877(a)(2)(B)
the net worth of the individual as of such date is $2,000,000 or more, or
I.R.C. § 877(a)(2)(C)
such individual fails to certify under penalty of perjury that he has met the requirements of this title for the 5 preceding taxable years or fails to submit such evidence of such compliance as the Secretary may require.
In the case of the loss of United States citizenship in any calendar year after 2004, such $124,000 amount shall be increased by an amount equal to such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting “2003” for “1992” in subparagraph (B) thereof. Any increase under the preceding sentence shall be rounded to the nearest multiple of $1,000.
I.R.C. § 877(b) Alternative Tax
A nonresident alien individual described in subsection (a) shall be taxable for the taxable year as provided in section 1 or 55, except that—1
1 Section 521(b)(31) of the Unemployment Compensation Amendments of 1992 amends subsection (b) of section 877 by striking “402(e)(1)” and inserting “402(d)(1)”. EFFECTIVE DATE. -- The amendments made by section 521 of the Unemployment Compensation Amendments of 1992 shall apply to distributions after December 31, 1992.
I.R.C. § 877(b)(1)
the gross income shall include only the gross income described in section 872(a) (as modified by subsection (d) of this section), and
I.R.C. § 877(b)(2)
the deductions shall be allowed if and to the extent that they are connected with the gross income included under this section, except that the capital loss carryover provided by section 1212(b) shall not be allowed; and the proper allocation and apportionment of the deductions for this purpose shall be determined as provided under regulations prescribed by the Secretary.
For purposes of paragraph (2), the deductions allowed by section 873(b) shall be allowed; and the deduction (for losses not connected with the trade or business if incurred in transactions entered into for profit) allowed by section 165(c)(2) shall be allowed, but only if the profit, if such transaction had resulted in a profit, would be included in gross income under this section. The tax imposed solely by reason of this section shall be reduced (but not below zero) by the amount of any income, war profits, and excess profits taxes (within the meaning of section 903) paid to any foreign country or possession of the United States on any income of the taxpayer on which tax is imposed solely by reason of this section.
I.R.C. § 877(c) Exceptions
I.R.C. § 877(c)(1) In General
Subparagraphs (A) and (B) of subsection (a)(2) shall not apply to an individual described in paragraph (2) or (3).
I.R.C. § 877(c)(2) Dual Citizens
I.R.C. § 877(c)(2)(A) In General
An individual is described in this paragraph if—
I.R.C. § 877(c)(2)(A)(i)
the individual became at birth a citizen of the United States and a citizen of another country and continues to be a citizen of such other country, and
I.R.C. § 877(c)(2)(A)(ii)
the individual has had no substantial contacts with the United States.
I.R.C. § 877(c)(2)(B) Substantial Contacts
An individual shall be treated as having no substantial contacts with the United States only if the individual—
I.R.C. § 877(c)(2)(B)(i)
was never a resident of the United States (as defined in section 7701(b)),
I.R.C. § 877(c)(2)(B)(ii)
has never held a United States passport, and
I.R.C. § 877(c)(2)(B)(iii)
was not present in the United States for more than 30 days during any calendar year which is 1 of the 10 calendar years preceding the individual's loss of United States citizenship.
I.R.C. § 877(c)(3) Certain Minors
An individual is described in this paragraph if—
I.R.C. § 877(c)(3)(A)
the individual became at birth a citizen of the United States,
I.R.C. § 877(c)(3)(B)
neither parent of such individual was a citizen of the United States at the time of such birth,
I.R.C. § 877(c)(3)(C)
the individual's loss of United States citizenship occurs before such individual attains age 18 1/2 , and
I.R.C. § 877(c)(3)(D)
the individual was not present in the United States for more than 30 days during any calendar year which is 1 of the 10 calendar years preceding the individual's loss of United States citizenship.
I.R.C. § 877(d) Special Rules For Source, Etc.
For purposes of subsection (b)—
I.R.C. § 877(d)(1) Source Rules
The following items of gross income shall be treated as income from sources within the United States:
I.R.C. § 877(d)(1)(A) Sale Of Property
Gains on the sale or exchange of property (other than stock or debt obligations) located in the United States.
I.R.C. § 877(d)(1)(B) Stock Or Debt Obligations
Gains on the sale or exchange of stock issued by a domestic corporation or debt obligations of United States persons or of the United States, a State or political subdivision thereof, or the District of Columbia.
I.R.C. § 877(d)(1)(C) Income Or Gain Derived From Controlled Foreign Corporation
Any income or gain derived from stock in a foreign corporation but only—
I.R.C. § 877(d)(1)(C)(i)
if the individual losing United States citizenship owned (within the meaning of section 958(a)), or is considered as owning (by applying the ownership rules of section 958(b)), at any time during the 2-year period ending on the date of the loss of United States citizenship, more than 50 percent of--
I.R.C. § 877(d)(1)(C)(i)(I)
the total combined voting power of all classes of stock entitled to vote of such corporation, or
I.R.C. § 877(d)(1)(C)(i)(II)
the total value of the stock of such corporation, and
I.R.C. § 877(d)(1)(C)(ii)
to the extent such income or gain does not exceed the earnings and profits attributable to such stock which were earned or accumulated before the loss of citizenship and during periods that the ownership requirements of clause (i) are met.
I.R.C. § 877(d)(2) Gain Recognition On Certain Exchanges
I.R.C. § 877(d)(2)(A) In General
In the case of any exchange of property to which this paragraph applies, notwithstanding any other provision of this title, such property shall be treated as sold for its fair market value on the date of such exchange, and any gain shall be recognized for the taxable year which includes such date.
I.R.C. § 877(d)(2)(B) Exchanges To Which Paragraph Applies
This paragraph shall apply to any exchange during the 10-year period beginning on the date the individual loses United States citizenship if—
I.R.C. § 877(d)(2)(B)(i)
gain would not (but for this paragraph) be recognized on such exchange in whole or in part for purposes of this subtitle,
I.R.C. § 877(d)(2)(B)(ii)
income derived from such property was from sources within the United States (or, if no income was so derived, would have been from such sources), and
I.R.C. § 877(d)(2)(B)(iii)
income derived from the property acquired in the exchange would be from sources outside the United States.
I.R.C. § 877(d)(2)(C) Exception
Subparagraph (A) shall not apply if the individual enters into an agreement with the Secretary which specifies that any income or gain derived from the property acquired in the exchange (or any other property which has a basis determined in whole or part by reference to such property) during such 10-year period shall be treated as from sources within the United States. If the property transferred in the exchange is disposed of by the person acquiring such property, such agreement shall terminate and any gain which was not recognized by reason of such agreement shall be recognized as of the date of such disposition.
I.R.C. § 877(d)(2)(D) Secretary May Extend Period
To the extent provided in regulations prescribed by the Secretary, subparagraph (B) shall be applied by substituting the 15-year period beginning 5 years before the loss of United States citizenship for the 10-year period referred to therein. In the case of any exchange occurring during such 5 years, any gain recognized under this subparagraph shall be recognized immediately after such loss of citizenship.
I.R.C. § 877(d)(2)(E) Secretary May Require Recognition Of Gain In Certain Cases
To the extent provided in regulations prescribed by the Secretary—
I.R.C. § 877(d)(2)(E)(i)
the removal of appreciated tangible personal property from the United States, and
I.R.C. § 877(d)(2)(E)(ii)
any other occurrence which (without recognition of gain) results in a change in the source of the income or gain from property from sources within the United States to sources outside the United States,
shall be treated as an exchange to which this paragraph applies.
I.R.C. § 877(d)(3) Substantial Diminishing Of Risks Of Ownership
For purposes of determining whether this section applies to any gain on the sale or exchange of any property, the running of the 10-year period described in subsection (a) and the period applicable under paragraph (2) shall be suspended for any period during which the individual's risk of loss with respect to the property is substantially diminished by—
I.R.C. § 877(d)(3)(A)
the holding of a put with respect to such property (or similar property),
I.R.C. § 877(d)(3)(B)
the holding by another person of a right to acquire the property, or
I.R.C. § 877(d)(3)(C)
a short sale or any other transaction.
I.R.C. § 877(d)(4) Treatment Of Property Contributed To Controlled Foreign Corporations
I.R.C. § 877(d)(4)(A) In General
If—
I.R.C. § 877(d)(4)(A)(i)
an individual losing United States citizenship contributes property during the 10-year period beginning on the date the individual loses United States citizenship to any corporation which, at the time of the contribution, is described in subparagraph (B), and
I.R.C. § 877(d)(4)(A)(ii)
income derived from such property immediately before such contribution was from sources within the United States (or, if no income was so derived, would have been from such sources),
any income or gain on such property (or any other property which has a basis determined in whole or part by reference to such property) received or accrued by the corporation shall be treated as received or accrued directly by such individual and not by such corporation. The preceding sentence shall not apply to the extent the property has been treated under subparagraph (C) as having been sold by such corporation.
I.R.C. § 877(d)(4)(B) Corporation Described
A corporation is described in this subparagraph with respect to an individual if, were such individual a United States citizen—
I.R.C. § 877(d)(4)(B)(i)
such corporation would be a controlled foreign corporation (as defined in section 957), and
I.R.C. § 877(d)(4)(B)(ii)
such individual would be a United States shareholder (as defined in section 951(b)) with respect to such corporation.
I.R.C. § 877(d)(4)(C) Disposition Of Stock In Corporation
If stock in the corporation referred to in subparagraph (A) (or any other stock which has a basis determined in whole or part by reference to such stock) is disposed of during the 10-year period referred to in subsection (a) and while the property referred to in subparagraph (A) is held by such corporation, a pro rata share of such property (determined on the basis of the value of such stock) shall be treated as sold by the corporation immediately before such disposition.
I.R.C. § 877(d)(4)(D) Anti-Abuse Rules
The Secretary shall prescribe such regulations as may be necessary to prevent the avoidance of the purposes of this paragraph, including where—
I.R.C. § 877(d)(4)(D)(i)
the property is sold to the corporation, and
I.R.C. § 877(d)(4)(D)(ii)
the property taken into account under subparagraph (A) is sold by the corporation.
I.R.C. § 877(d)(4)(E) Information Reporting
The Secretary shall require such information reporting as is necessary to carry out the purposes of this paragraph.
I.R.C. § 877(e) Comparable Treatment Of Lawful Permanent Residents Who Cease To Be Taxed As Residents
I.R.C. § 877(e)(1) In General
Any long-term resident of the United States who ceases to be a lawful permanent resident of the United States (within the meaning of section 7701(b)(6)) shall be treated for purposes of this section and sections 2107, 2501, and 6039G in the same manner as if such resident were a citizen of the United States who lost United States citizenship on the date of such cessation or commencement.
I.R.C. § 877(e)(2) Long-Term Resident
For purposes of this subsection, the term “long-term resident” means any individual (other than a citizen of the United States) who is a lawful permanent resident of the United States in at least 8 taxable years during the period of 15 taxable years ending with the taxable year during which the event described in paragraph (1) occurs. For purposes of the preceding sentence, an individual shall not be treated as a lawful permanent resident for any taxable year if such individual is treated as a resident of a foreign country for the taxable year under the provisions of a tax treaty between the United States and the foreign country and does not waive the benefits of such treaty applicable to residents of the foreign country.
I.R.C. § 877(e)(3) Special Rules
I.R.C. § 877(e)(3)(A) Exceptions Not To Apply
Subsection (c) shall not apply to an individual who is treated as provided in paragraph (1).
I.R.C. § 877(e)(3)(B) Step-Up In Basis
Solely for purposes of determining any tax imposed by reason of this subsection, property which was held by the long-term resident on the date the individual first became a resident of the United States shall be treated as having a basis on such date of not less than the fair market value of such property on such date. The preceding sentence shall not apply if the individual elects not to have such sentence apply. Such an election, once made, shall be irrevocable.
I.R.C. § 877(e)(4) Authority To Exempt Individuals
This subsection shall not apply to an individual who is described in a category of individuals prescribed by regulation by the Secretary.
I.R.C. § 877(e)(5) Regulations
The Secretary shall prescribe such regulations as may be appropriate to carry out this subsection, including regulations providing for the application of this subsection in cases where an alien individual becomes a resident of the United States during the 10-year period after being treated as provided in paragraph (1).
I.R.C. § 877(f) Burden Of Proof
If the Secretary establishes that it is reasonable to believe that an individual's loss of United States citizenship would, but for this section, result in a substantial reduction for the taxable year in the taxes on his probable income for such year, the burden of proving for such taxable year that such loss of citizenship did not have for one of its principal purposes the avoidance of taxes under this subtitle or subtitle B shall be on such individual.
I.R.C. § 877(g) Physical Presence
I.R.C. § 877(g)(1) In General
This section shall not apply to any individual to whom this section would otherwise apply for any taxable year during the 10-year period referred to in subsection (a) in which such individual is physically present in the United States at any time on more than 30 days in the calendar year ending in such taxable year, and such individual shall be treated for purposes of this title as a citizen or resident of the United States, as the case may be, for such taxable year.
I.R.C. § 877(g)(2) Exception
I.R.C. § 877(g)(2)(A) In General
In the case of an individual described in any of the following subparagraphs of this paragraph, a day of physical presence in the United States shall be disregarded if the individual is performing services in the United States on such day for an employer. The preceding sentence shall not apply if—
I.R.C. § 877(g)(2)(A)(i)
such employer is related (within the meaning of section 267 and 707) to such individual, or
I.R.C. § 877(g)(2)(A)(ii)
such employer fails to meet such requirements as the Secretary may prescribe by regulations to prevent the avoidance of the purposes of this paragraph.
Not more than 30 days during any calendar year may be disregarded under this subparagraph.
I.R.C. § 877(g)(2)(B) Individuals With Ties To Other Countries
An individual is described in this subparagraph if—
I.R.C. § 877(g)(2)(B)(i)
the individual becomes (not later than the close of a reasonable period after loss of United States citizenship or termination of residency) a citizen or resident of the country in which—
I.R.C. § 877(g)(2)(B)(i)(I)
such individual was born,
I.R.C. § 877(g)(2)(B)(i)(II)
if such individual is married, such individual's spouse was born, or
I.R.C. § 877(g)(2)(B)(i)(III)
either of such individual's parents were born, and
I.R.C. § 877(g)(2)(B)(ii)
the individual becomes fully liable for income tax in such country.
I.R.C. § 877(g)(2)(C) Minimal Prior Physical Presence In The United States
An individual is described in this subparagraph if, for each year in the 10-year period ending on the date of loss of United States citizenship or termination of residency, the individual was physically present in the United States for 30 days or less. The rule of section 7701(b)(3)(D) shall apply for purposes of this subparagraph.
I.R.C. § 877(h) Termination
This section shall not apply to any individual whose expatriation date (as defined in section 877A(g)(3)) is on or after the date of the enactment of this subsection.
(Added by Pub. L. 89-809, title I, 103(f)(1), Nov. 13, 1966, 80 Stat. 1551, and amended by Pub. L. 93-406, title II, 2005(c)(8), Sept. 2, 1974, 88 Stat. 992; Pub. L. 94-455, title XIX, 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 95-600, title IV, 421(e)(5), Nov. 6, 1978, 92 Stat. 2876; Pub. L. 96-222, title I, 104(a)(1), (4)(H)(v), Apr. 1, 1980, 94 Stat. 214, 217; Pub. L. 99-514, title XII, 1243(a), Oct. 22, 1986, 100 Stat. 2580; Pub. L. 102-318, title V, 511(b)(31), Jul. 3, 1992, 106 Stat. 290 Pub. L. 104-188, title I, 1401(b)(11), Aug. 20, 1996, 110 Stat. 1755; Pub. L. 104-188, title I, 1401(b)(11), Aug. 20, 1996, 110 Stat. 1755; Pub. L. 104-191, title V, 511, Aug. 21, 1996, 110 Stat. 1936; Pub. L. 105-34, title III, XVI, Sec. 312(d)[e](4), 1602(g), (h)(3), Aug. 5, 1997, 111 Stat 788; Pub. L. 108-357, title VIII, Sec. 804, Oct. 22, 2004, 118 Stat. 1418; Pub. L. 109-135, title IV, Sec. 403(v)(1), Dec. 21, 2005, 119 Stat. 2577; Pub. L. 110-245, Sec. 301, June 17, 2008, 122 Stat. 1624; Pub. L. 113-295, Div. A, title II, Sec. 213(c)(2), Dec. 19, 2014, 128 Stat. 4010; Pub. L. 115-141, Div. U, title IV, Sec. 401(a)(153), Mar. 23, 2018, 132 Stat. 348.)
BACKGROUND NOTES
AMENDMENTS
2018--Subpar. (d)(4)(B)(i). Pub. L. 115-141, Div. U, Sec. 401(a)(153), amended clause (i) by substituting “in section 957” for “in 957”.
2014--Subpar. (e)(2). Pub. L. 113-295, Div. A, Sec. 213(c)(2), amended par. (2) by striking “subparagraph (A) or (B) of”.
2008--Subsec. (e)(1). Pub. L. 110-245, Sec. 301(c)(2)(A), amended par. (1). Before amendment, it read as follows:
“(1) In General.- Any long-term resident of the United States who--
“(A) ceases to be a lawful permanent resident of the United States (within the meaning of section 7701(b)(6)), or
“(B) commences to be treated as a resident of a foreign country under the provisions of a tax treaty between the United States and the foreign country and who does not waive the benefits of such treaty applicable to residents of the foreign country, shall be treated for purposes of this section and sections 2107, 2501, and 6039G in the same manner as if such resident were a citizen of the United States who lost United States citizenship on the date of such cessation or commencement.”
Subsec. (h). Pub. L. 110-245, Sec. 301(d), added subsec. (h).
2005--Subsec. (g)(2)(C). Pub. L. 109-135, Sec. 403(v)(1), amended subpar. (C) by substituting “section 7701(b)(3)(D)" for “section 7701(b)(3)(D)(ii)”.
2004--Subsec. (a). Pub. L. 108-357, Sec. 804(a), amended subsec. (a). Prior to amendment, it read as follows:
“(a) Treatment of Expatriates
“(1) In general
Every nonresident alien individual who, within the 10-year period immediately preceding the close of the taxable year, lost United States citizenship, unless such loss did not have for 1 of its principal purposes the avoidance of taxes under this subtitle or subtitle B, shall be taxable for such taxable year in the manner provided in subsection (b) if the tax imposed pursuant to such subsection (after any reduction in such tax under the last sentence of such subsection) exceeds the tax which, without regard to this section, is imposed pursuant to section 871.
“(2) Certain individuals treated as having tax avoidance purpose
“For purposes of paragraph (1), an individual shall be treated as having a principal purpose to avoid such taxes if--
“(A) the average annual net income tax (as defined in section 38(c)(1)) of such individual for the period of 5 taxable years ending before the date of the loss of United States citizenship is greater than $100,000, or
“(B) the net worth of the individual as of such date is $500,000 or more.
In the case of the loss of United States citizenship in any calendar year after 1996, such $100,000 and $500,000 amounts shall be increased by an amount equal to such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting ‘1994’ for ‘1992’ in subparagraph (B) thereof. Any increase under the preceding sentence shall be rounded to the nearest multiple of $1,000.”
Subsec. (c). Pub. L. 108-357, Sec. 804(a)(2), amended subsec. (c). Prior to amendment, it read as follows:
“(c) Tax avoidance not presumed in certain cases
“(1) In general
“Subsection (a)(2) shall not apply to an individual if--
“(A) such individual is described in a subparagraph of paragraph (2) of this subsection, and
“(B) within the 1-year period beginning on the date of the loss of United States citizenship, such individual submits a ruling request for the Secretary's determination as to whether such loss has for 1 of its principal purposes the avoidance of taxes under this subtitle or subtitle B.
“(2) Individuals described
“(A) Dual citizenship, etc.
“An individual is described in this subparagraph if--
“(i) the individual became at birth a citizen of the United States and a citizen of another country and continues to be a citizen of such other country, or
“(ii) the individual becomes (not later than the close of a reasonable period after loss of United States citizenship) a citizen of the country in which--
“(I) such individual was born,
“(II) if such individual is married, such individual's spouse was born, or
“(III) either of such individual's parents were born.
“(B) Long-term foreign residents
“An individual is described in this subparagraph if, for each year in the 10-year period ending on the date of loss of United States citizenship, the individual was present in the United States for 30 days or less. The rule of section 7701(b)(3)(D)(ii) shall apply for purposes of this subparagraph.
“(C) Renunciation upon reaching age of majority
“An individual is described in this subparagraph if the individual's loss of United States citizenship occurs before such individual attains age 18 1/2.
“Individuals specified in regulations
“An individual is described in this subparagraph if the individual is described in a category of individuals prescribed by regulation by the Secretary.”
Subsec. (g). Pub. L. 108-357, Sec. 804(c), added subsec. (g).
1997--Subsec. (d)(2)(B). Pub. L. 105-34, Sec. 1602(g)(1). Struck out “the 10-year period described in subsection (a)” and inserted “the 10-year period beginning on the date the individual loses United States citizenship”.
Subsec. (d)(2)(D). Pub. L. 105-34, Sec. 1602(g)(2). Added a new sentence at the end of subparagraph (D).
Subsec. (d)(3). Pub. L. 105-34, Sec. 1602(g)(3). Inserted “and the period applicable under paragraph (2)” after “subsection (a)” in paragraph (3).
Subsec. (d)(4)(A). Pub. L. 105-34, Sec. 1602(g)(4). Inserted “during the 10-year period beginning on the date the individual loses United States citizenship” after “contributes property” in clause (i), and struck out “during the 10-yer period referred to in subsection (a),” of subparagraph (A).
Subsec. (e)(1). Pub. L. 105-34, Sec. 1602(h)(3), struck out “6039F” and inserted “6039G” of paragraph (1).
1996--Subsec. (b). Pub. L. 104-188 substituted “section 1 or 55” for “section 1, 55, or 402(d)(1)”.
1996--Subsec. (a). Pub. L. 104-191 amended subsec. (a). Before amendment, subsec. (a) read as follows:
“(a) In general
Every nonresident alien individual who at any time after March 8, 1965, and within the 10-year period immediately preceding the close of the taxable year lost United States citizenship, unless such loss did not have for one of its principal purposes the avoidance of taxes under this subtitle or subtitle B, shall be taxable for such taxable year in the manner provided in subsection (b) if the tax imposed pursuant to such subsection exceeds the tax which, without regard to this section, is imposed pursuant to section 871.”
Subsec. (b). Pub. L. 104-191 added the sentence at the end.
Subsec. (b)(1). Pub. L. 104-191 substituted “subsection (d)” for “subsection (c)”.
Subsec. (c), (d). Pub. L. 104-191 struck subsec. (d), redesignated subsec. (c) as subsec. (d), and added a new subsec. (c). Before it was struck, subsec. (d) read as follows:
“(d) Exception for loss of citizenship for certain causes
Subsection (a) shall not apply to a nonresident alien individual whose loss of United States citizenship resulted from the application of section 301(b), 350, or 355 of the Immigration and Nationality Act, as amended (8 U.S.C. 1401(b), 1482, or 1487).”
Subsec. (d). Pub. L. 104-191 amended subsec. (d) [as redesignated by sec. 511(b)(1)]. Before amendment, subsec. (d) read as follows:
“(d) Special rules of source
For purposes of subsection (b), the following items of gross income shall be treated as income from sources within the United States:
(1) Sale of property
Gains on the sale or exchange of property (other than stock or debt obligations) located in the United States.
(2) Stock or debt obligations
Gains on the sale or exchange of stock issued by a domestic corporation or debt obligations of United States persons or of the United States, a State or political subdivision thereof, or the District of Columbia.
For purposes of this section, gain on the sale or exchange of property which has a basis determined in whole or in part by reference to property described in paragraph (1) or (2) shall be treated as gain described in paragraph (1) or (2).”
Subsec. (e), (f). Pub. L. 104-191 redesignated subsec. (e) as subsec. (f) and added a new subsec. (e).
1992--Subsec. (b).Pub. L. 102-318, substituted “402(d)(1)” for “402(e)(1)”.
1986--Subsec. (c). Pub. L. 99-514 inserted at end “For purposes of this section, gain on the sale or exchange of property which has a basis determined in whole or in part by reference to property described in paragraph (1) or (2) shall be treated as gain described in paragraph (1) or (2).”
1980--Subsec. (b). Pub. L. 96-222 substituted “55, or 402(e)(1)” for “section 55, 402(e)(1), or section 1201(b)”.
1978--Subsec. (b). Pub. L. 95-600 substituted “section 1, section 55,” for “section 1”.
1976--Subsecs. (b)(2), (e). Pub. L. 94-455 struck out “or his delegate” after “Secretary”.
1974--Subsec. (b). Pub. L. 93-406 inserted reference to section 402(e)(1).
EFFECTIVE DATE OF 2018 AMENDMENTS
Amendment by Pub. L. 115-141, Div. U, Sec. 401(a)(153), effective March 23, 2018.
EFFECTIVE DATE OF 2014 AMENDMENTS
Amendment by Pub. L. 113-295, Div. A, Sec. 213(c)(2), effective as if included in the provision of the Heroes Earnings Assistance and Relief Tax Act of 2008 [Pub. L. 110-245, Sec. 301] to which it relates [Effective for any individual whose expatriation date (as so defined) is on or after June 17, 2008].
EFFECTIVE DATE OF 2008 AMENDMENTS
Amendment by Sec. 301 of Pub. L. 110-245 effective for any individual whose expatriation date (as so defined) is on or after the date of the enactment of this Act [Enacted: June 17, 2008].
EFFECTIVE DATE OF 2005 AMENDMENTS
Amendment by Sec. 403(v)(1) of Pub. L. 109-135 effective as if included in the provisions of the American Jobs Creation Act of 2004 [Pub. L. 108-357, Sec. 804] to which they relate.
EFFECTIVE DATE OF 2004 AMENDMENTS
Amendments by Sec. 804 of Pub. L. 108-357 effective for individuals who expatriate after June 3, 2004.
EFFECTIVE DATE OF 1997 AMENDMENTS
Section 1602(I) of Pub. L. 105-34 provided that:
“The amendments made by this section shall take effect as if included in the provisions of the Health Insurance Portability and Accountability Act of 1996 to which such amendments relate [enacted: Aug. 5, 1997]”.
EFFECTIVE DATE OF 1996 AMENDMENTS
Amendment by Pub. L. 104-188 effective, except as otherwise provided, for taxable years beginning after December 31, 1999. Section 1401(c)(2) of Pub. L. 104-188 provided that: “The amendments made by this section shall not apply to any distribution for which the taxpayer is eligible to elect the benefits of section 1122(h)(3) or (h)(5) of the Tax Reform Act of 1986. Notwithstanding the preceding sentence, individuals who elect such benefits after December 31, 1999, shall not be eligible for 5-year averaging under section 402(d) of the Internal Revenue Code of 1986 (as in effect immediately before such amendment.”
Amendment by Pub. L. 104-191 effective, except as otherwise provided, for:
“(A) individuals losing United States citizenship (within the meaning of section 877 of the Internal Revenue Code of 1986) on or after February 6, 1995, and
(B) long-term residents of the United States with respect to whom an event described in subparagraph (A) or (B) of section 877(e)(1) of such Code occurs on or after February 6, 1995.
(2) Ruling requests.--In no event shall the 1-year period referred to in section 877(c)(1)(B) of such Code, as amended by this section, expire before the date which is 90 days after the date of the enactment of this Act [Aug. 21, 1996].
(3) Special rule.--
(A) In general.--In the case of an individual who performed an act of expatriation specified in paragraph (1), (2), (3), or (4) of section 349 (a) of the Immigration and Nationality Act (8 U.S.C. 1481(a)(1)-(4)) before February 6, 1995, but who did not, on or before such date, furnish to the United States Department of State a signed statement of voluntary relinquishment of United States nationality confirming the performance of such act, the amendments made by this section and section 512 shall apply to such individual except that the 10-year period described in section 877(a) of such Code shall not expire before the end of the 10-year period beginning on the date such statement is so furnished.
(B) Exception.--Subparagraph (A) shall not apply if the individual establishes to the satisfaction of the Secretary of the Treasury that such loss of United States citizenship occurred before February 6, 1994.”
EFFECTIVE DATE OF 1992 AMENDMENTS
Amendment by Pub. L. 102-318 applicable to distributions after December 31, 1992. Sec. 511(d)(2) provided: “(2) SPECIAL RULE FOR PARTIAL DISTRIBUTIONS.—For purposes of section 402(a)(5)(D)(i)(II) of the Internal Revenue Code of 1986 (as in effect before the amendments made by this section), a distribution before January 1, 1993, which is made before or at the same time as a series of periodic payments shall not be treated as one of such series if it is not substantially equal in amount to other payments in such series.”
EFFECTIVE DATE OF 1986 AMENDMENTS
Section 1243(b) of Pub. L. 99-514 provided that: “The amendment made by subsection (a) [amending this section] shall apply to sales or exchanges of property received in exchanges after September 25, 1985.”
EFFECTIVE DATE OF 1980 AMENDMENTS
Amendment by Pub. L. 96-222 effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978, Pub. L. 95-600, to which such amendment relates, see section 201 of Pub. L. 96-222, set out as a note under section 32 of this title.
EFFECTIVE DATE OF 1978 AMENDMENTS
Amendment by Pub. L. 95-600 applicable to taxable years beginning after Dec. 31, 1978, see section 421(g) of Pub. L. 95-600, set out as a note under section 5 of this title.
EFFECTIVE DATE OF 1974 AMENDMENTS
Amendment by Pub. L. 93-406 applicable only with respect to distributions or payments made after Dec. 31, 1973, in taxable years beginning after Dec. 31, 1973, see section 2005(d) of Pub. L. 93-406, set out as a note under section 402 of this title.
EFFECTIVE DATE
Section applicable with respect to taxable years beginning after Dec. 31, 1966, see section 103(n)(1) of Pub. L. 89-809, set out as an Effective Date of 1966 Amendment note under section 871 of this title.
BINDING CONTRACTS
Section 312(d)[e](4) of Pub. L. 105-34 provided that:
“(4) Binding contracts.--At the election of the taxpayer, the amendments made by this section shall not apply to a sale or exchange after the date of the enactment of this Act, if--
“(A) such sale or exchange is pursuant to a contract which was binding on such date, or
“(B) without regard to such amendments, gain would not be recognized under section 1034 of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of this Act) on such sale or exchange by reason of a new residence acquired on or before such date or with respect to the acquisition of which by the taxpayer a binding contract was in effect on such date.
“This paragraph shall not apply to any sale or exchange by an individual if the treatment provided by section 877(a)(1) of the Internal Revenue Code of 1986 applies to such individual.”
PRIOR PROVISIONS
A prior section 877, act Aug. 16, 1954, ch. 736, 68A Stat. 282, relating to foreign educational, charitable, and other exempt organizations, was renumbered section 878 of this title.