The Harvey Law Group has highlighted that US nationals are interested in dual citizenship with crypto regulation being a major factor. Americans are looking at opportunities in other countries because of economic uncertainty, political upheaval, and the ongoing COVID-19 pandemic.
Steve Corbin, an immigration lawyer at Harvey Law Group, says recent trends include individuals wanting to move to regions implementing strong pro-business, particularly pro-cryptocurrency approaches and policies. Despite US President Joe Biden’s crypto executive order being an important step in the policy-making process, industry watchers say concrete legislation could take years.
Half of Harvey Law Group’s clients are involved in crypto. Corbin said many clients bought crypto assets five or so years ago. They have recorded substantial gains in their holdings. And they want to take advantage of a jurisdiction that’s not going to tax them or implement a heavy tax on their gains. Cryptocurrencies in the US are regarded as property and general tax principles applicable to property transactions also fall on digital assets. When investors sell their crypto, they must recognize any capital gain or loss on the sale which is subject to any limitations on the deductibility of capital losses. If the crypto was held for more than a year, it is seen as a long-term capital gain or loss.
Corbin also highlighted that clients are ready to renounce their US citizenship to avoid future taxes. Antigua is one of the most popular destinations for crypto holders. This Caribbean nation doesn’t have personal income, capital gains, inheritance, or wealth taxes. Those wanting to move out of the United States are looking at countries like Nevis, Vanuatu, Saint Kitts, and Portugal.
Lewis Kevelson, the director of international tax services at Berkowitz Pollack Brant, highlighted that the US imposes an exit tax on residents renouncing citizenship. This applies to those whose net worth is more than $2 million. He explained that those whose net worth is less than $2 million can plan to exit the country with their securities and avoid the capital gains tax on a future sale when they leave the US.