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associated with participation in the project. Earnings of
a non-resident from a U.S. partnership are subject to U.S.
tax withholding rules. The IRS requires the partnership to
withhold tax, usually at a rate of 37% for 2019. Because the
tax is being withheld at the maximum tax rates, the non-
resident taxpayer is not required to present a U.S. non-
resident tax return. However, in a significant number of
cases, this tax rate may be significantly higher than the
individual’s corresponding tax rate.
Non-resident taxpayers may prepare a U.S. non-
resident tax return to request a refund of any tax
paid in excess. These taxes may significantly affect
the investors return on investment because, in some
cases, there may not be any tax due or at least tax
rates can be lower between 10% and 30%.
PLANNING TO BECOME
A U.S. TAX RESIDENT
Once an individual has decided to apply for an EB-5
immigrant visa, it is important to begin the tax
planning process as soon as possible. The investor will
usually need to engage with accountants and attorneys
in the U.S. and his or her home country to be able to
effectively organize and design to minimize the tax
impact of becoming a U.S resident. Some strategies often
include liquidation of passive investment companies,
transferring financial assets to U.S. bank s, and
disposition of certain assets.
Additionally, the moment of becoming a U.S. tax resident
is a moment where individuals may capitalize on certain
tax rules that allow him or her to “step up” the cost
basis in appreciated assets, significantly reducing taxes
on capital gains when selling the assets. The strategies
that apply to each individual vary on the particular
circumstances, laws and regulations of a home country
and any U.S. tax treaties with that country.
COMMON REQUIREMENTS OF U.S.
RESIDENTS WITH FOREIGN ASSETS
There could be significant tax implications for U.S.
residents with foreign assets. Certain documents needs
to be filed once an investor becomes a U.S. resident
for tax purposes, including form 1040, which is the
Individual Income Tax Return Form that is used by
citizens or residents of the United States to file an
annual income tax return and worldwide income.
They also need to file the FBAR (FinCEN) Form 114,
which is the Report of Foreign Bank and Financial
Accounts. According to the IRS, United States residents
or citizens are required to file an FBAR if they have
a financial interest in or signature authority over
at least one financial account located outside of the
United States and the aggregate value of all foreign