🧮 40% Tax, 60 Pages of Rules, 100% on the U.S. Recipient
Section 2801 has quietly sat in the Code since 2008. Now, with final regulations and the release of Form 708, it has become a very real 40% tax risk for U.S. beneficiaries of former citizens and long‑term green card holders. Unlike the “normal” estate and gift tax system—where the donor or the estate usually bears the liability—this regime squarely targets U.S. recipients of “covered gifts” and “covered bequests” from “covered expatriates.” ⏰ In this issue, I break down what’s changed and why it matters: •✅ How the final §2801 regulations and Form 708 turn a dormant rule into an enforceable inheritance‑style tax on cross‑border wealth. •✅ The current definition of a “covered expatriate,” including the income‑tax, net‑worth, and certification tests that can turn a former U.S. person into a permanent problem for their U.S. heirs. •✅ What counts as a “covered gift” or “covered bequest,” how the 19,000‑dollar annual buffer works, and which transfers (charitable, marital, already‑taxed)...
