Architectural Wealth Protection: Pre-Immigration Tax Planning for High-Net-Worth Individuals

Immigration status and tax residency do not always align. Worldwide U.S. taxation can begin under either of two core tests.

• Green Card Test: lawful permanent resident status can create U.S. tax residency during the calendar year.
• Substantial Presence Test: residency can arise from at least 31 U.S. days in the current year and a weighted total of 183 days over the three-year look-back formula.

Once U.S. tax residency begins, worldwide income and gains generally enter the U.S. system, and extensive foreign-asset reporting may apply. Transactions completed after residency can produce very different results from actions completed while the individual is still a non-resident alien.

• Basis planning: review appreciated securities, real estate and business interests before residency begins.
• Foreign trusts: analyze trust classification, accumulated income and potential pre-residency distributions or restructuring.
• Foreign corporations: evaluate ownership that may create CFC, Subpart F, GILTI and Form 5471 exposure.
• Income and transaction timing: model bonuses, dividends, exits and major sales around the residency start date.