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2024

Instructions for Form 8854

Initial and Annual Expatriation Statement

Section references are to the Internal Revenue Code unless Individuals who expatriated before June 17, 2008, who
otherwise noted. have previously filed a Form 8854, but who still have an
annual reporting requirement in 2024 under section 877,
Future Developments should also use the 2018 Form 8854 but modify the year on
For the latest information about developments related to the form by crossing out 2018 and entering 2024.
Form 8854 and its instructions, such as legislation enacted
after they were published, go to IRS.gov/Form8854. Who Must File

What's New You must file your initial Form 8854 (Parts I and II) if you
Procedure for requesting a deferral of the payment of relinquished your U.S. citizenship in 2024 or you are a
tax. You are no longer required to contact the IRS to make long-term resident (LTR), defined below, and terminated your
appropriate arrangements for providing security. residency in 2024.
New line on Form 8854. A new line 3 was added in Part II,
You must file your annual Form 8854 (Parts I and III) if you
Section A, Expatriation Information. Expatriates must report
expatriated before 2024 and you:
whether there were any significant changes in their assets
and liabilities during the 5 years ending before their 1. Deferred the payment of tax,
expatriation date. 2. Have an item of eligible deferred compensation, or
Increase in average annual net income tax liability. The 3. Are a beneficiary of a nongrantor trust.
average annual net income tax liability for the 5 tax years
ending before your expatriation date, which is used to Expatriation. Expatriation includes the acts of relinquishing
determine whether an individual is a covered expatriate, has U.S. citizenship and terminating long-term residency.
increased to $201,000. For more information, see Covered Date of relinquishment of U.S. citizenship. You are
expatriate, later. considered to have relinquished your U.S. citizenship (and
consequently, have an expatriation date) on the earliest of the
Increase in threshold for net unrealized gain on proper- following dates.
ty. For 2024, if you are a covered expatriate, the net gain that
you must otherwise include in your income is reduced by 1. The date you renounced your U.S. citizenship before a
$866,000. For more information, see Taxation Under Section diplomatic or consular officer of the United States (provided
877A, later. that the voluntary renouncement was later confirmed by the
issuance of a certificate of loss of nationality).
2. The date you furnished to the State Department a
General Instructions signed statement of your voluntary relinquishment of a U.S.
nationality confirming the performance of an expatriating act
Purpose of Form (provided that the voluntary relinquishment was later
Section 877A applies to U.S. citizens who have relinquished confirmed by the issuance of a certificate of loss of
their citizenship and long-term residents who have ended nationality).
their residency (expatriated) on or after June 17, 2008. 3. The date the State Department issued a certificate of
Form 8854 is used by expatriates to certify compliance loss of nationality.
with tax obligations in the 5 years before expatriation and to 4. The date a U.S. court canceled your certificate of
comply with their initial and annual information reporting naturalization.
obligations under section 6039G.
Long-term resident (LTR) defined. You are an LTR if you
Note. Individuals who expatriated for immigration purposes were a lawful permanent resident of the United States in at
after June 3, 2004, and before June 17, 2008, but who have least 8 of the last 15 tax years ending with the year you are
not previously filed a Form 8854, continue to be treated as no longer treated as a lawful permanent resident. In
U.S. citizens or U.S. lawful permanent residents for U.S. determining if you meet the 8-year requirement, don't count
income tax purposes until they file a Form 8854. See section any year if in that year you were treated as a resident of a
7701(n), as in effect before June 17, 2008. foreign country under a tax treaty and did not waive treaty
Individuals in this category are subject to section 877 once benefits applicable to residents of that country.
they file the Form 8854. These individuals should use the Lawful permanent resident. You are a lawful permanent
2018 Form 8854 and the Instructions for Form 8854 (but resident of the United States if you have been given the
modify the year on the form by crossing out 2018 and privilege, according to U.S. immigration laws, of residing
entering the year of actual filing) for purposes of filing their permanently in the United States as an immigrant. You
initial and/or annual expatriation statements pursuant to generally have this status if you have been issued an alien
section 877 going forward. registration card, also known as a green card, and your green
card hasn't been revoked or judicially or administratively

Instructions for Form 8854 (2024) Catalog Number 24874E
Nov 15, 2024 Department of the Treasury Internal Revenue Service www.irs.gov

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determined to have been abandoned. However, you are also Certain minors. You can qualify for the exception
no longer treated as a lawful permanent resident if you (1) described above if you meet both of the following
commenced to be treated as a resident of a foreign country requirements.
under the provisions of a tax treaty, (2) did not waive the • You expatriated before you were age 18 / .1 2
benefits of such treaty, and (3) notified the IRS of the • You were a resident of the United States for not more than
commencement of such treatment. See Regulations section 10 tax years before you expatriated. For the purpose of
301.7701(b)-7 for information on related filing requirements. determining U.S. residency, use the substantial presence test
Date of termination of long-term residency. If you were described in chapter 1 of Pub. 519.
an LTR, you terminated your lawful permanent residency
(and consequently, have an expatriation date) on the earliest Note. If you have relinquished or intend to relinquish your
of the following dates. U.S. citizenship, and you wish to come into compliance with
your U.S. income tax and reporting requirements in order to
1. The date you voluntarily abandoned your lawful
avoid being treated as a covered expatriate under section
permanent resident status by filing Department of Homeland
877A, you may qualify for certain relief procedures. See
Security Form I-407 with a U.S. consular or immigration
IRS.gov/Individuals/International-Taxpayers/Relief-
officer.
Procedures-for-Certain-Former-Citizens.
2. The date you became subject to a final administrative
order that you abandoned your lawful permanent resident Penalties. If you are subject to section 877A and required to
status (or, if such order has been appealed, the date of a final file Form 8854 for any tax year, and you fail to file or do not
judicial order issued in connection with such administrative include all the information required by the form, or the form
order). includes incorrect information, you will owe a penalty of
$10,000 for that year, unless it is shown that such failure is
3. The date you became subject to a final administrative due to reasonable cause and not willful neglect.
or judicial order for your removal from the United States
under the Immigration and Nationality Act. Taxation Under Section 877A
4. If you were a dual resident of the United States and a If you are a covered expatriate in the year you expatriate, you
country with which the United States has an income tax are subject to income tax on the net unrealized gain in your
treaty, the date on which you commenced to be treated as a property as if the property had been sold for its fair market
resident of that country under the treaty, did not waive the value (FMV) on the day before your expatriation date
benefits of the treaty, and gave notice to the IRS of the (“mark-to-market tax”). This applies to most types of property
commencement of such treatment. See Regulations section interests you held on the date of your expatriation. But see
301.7701(b)-7 for information on related filing requirements. Exceptions, later.
Covered expatriate. You are a covered expatriate if you Gains from deemed sales are taken into account without
expatriated after June 16, 2008, and any of the following regard to other rules under the Code. Losses from deemed
statements apply. sales are taken into account to the extent otherwise allowed
1. Your average annual net income tax liability for the 5 under the Code. However, section 1091 (relating to the
tax years ending before the date of expatriation is more than disallowance of losses on wash sales of stock and securities)
$201,000. doesn't apply. For 2024, the net gain that you must otherwise
2. Your net worth was $2 million or more on the date of include in your income is reduced (but not below zero) by
your expatriation. $866,000.
3. You fail to certify on Form 8854 that you have complied Exceptions. The mark-to-market tax does not apply to the
with all federal tax obligations for the 5 tax years preceding following.
the date of your expatriation. 1. Eligible deferred compensation items.
Exception for dual-citizens and certain minors. 2. Ineligible deferred compensation items.
Dual-citizens and certain minors (defined next) won't be 3. Specified tax deferred accounts.
treated as covered expatriates (and therefore won't be 4. Interests in nongrantor trusts.
subject to the expatriation tax) solely because one or both of
the statements in paragraph (1) or (2) under Covered Instead, item (1) is subject to withholding, provided that
expatriate, earlier, applies. However, these individuals will still you (i) properly make an irrevocable waiver on your initial
be treated as covered expatriates unless they file Form 8854 filing of this form of any right to claim any reduction in
and certify that they have complied with all federal tax withholding under an applicable treaty between the United
obligations for the 5 tax years preceding the date of States and your country of residence (see Line 1a under Part
expatriation as required in paragraph (3) under Covered II, Section C, later); and (ii) timely notify the payor on Form
expatriate, earlier. W-8CE. To timely notify the payor on Form W-8CE, you must
Certain dual-citizens. You can qualify for the exception file the Form W-8CE with the payor on the earlier of:
described above if you meet both of the following • The day before the first distribution on or after your
requirements. expatriation date, or
• You became at birth a U.S. citizen and a citizen of another • 30 days after your expatriation date.
country and, as of your expatriation date, you continue to be In the case of item (2), you are treated as receiving the
a citizen of, and are taxed as a resident of, that other country. present value of your accrued benefit as of the day before
• You were a resident of the United States for not more than your expatriation date and you should include this amount on
10 years during the 15-tax-year period ending with the tax your Form 1040 or 1040-SR for the year that includes your
year during which you expatriated. For the purpose of expatriation date. In the case of item (3), you are treated as
determining U.S. residency, use the substantial presence test receiving a distribution of your entire interest in the account
described in chapter 1 of Pub. 519. on the day before your expatriation date and you should

2 Instructions for Form 8854 (2024)

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include this amount on your Form 1040 or 1040-SR for the Where To File
year that includes your expatriation date. See paragraphs (d),
1. Send your original initial or annual Form 8854 to the
(e), and (f) of section 877A.
address listed in item (2) below.
Item (4) is subject to withholding, and you are treated as
2. If you elected to defer the payment of any tax due, see
having waived any right to claim any reduction in withholding
the instructions under Part II, Section D, Line 5, later, and
under an applicable treaty between the United States and
send your tax deferral agreement request to the address
your country of residence, unless you elect to be treated as
listed below.
having received the value of your entire interest in the trust by
obtaining a ruling from the IRS to that effect. See Section C Internal Revenue Service
under Part II, later. 3651 S IH35
Deferral of the payment of mark-to-market tax. You can MS 4301 AUSC
make an irrevocable election to defer the payment of the Austin, TX 78741
mark-to-market tax imposed on the deemed sale of property.
If you make this election, the following rules apply. Note. If you were a U.S. person for any portion of 2024, you
1. You make the election on a property-by-property basis. may be required to file Financial Crimes Enforcement
Network (FinCEN) Form 114, Report of Foreign Bank and
2. The deferred tax on a particular property is due on the Financial Accounts (FBAR). In addition, you may be required
return for the tax year in which you dispose of the property. to file Form 8938, Statement of Specified Foreign Financial
3. Interest is charged for the period the tax is deferred. Assets. For more information, go to IRS.gov/FBAR.
4. The due date for the payment of the deferred tax
cannot be extended beyond the earlier of the following dates. Specific Instructions
a. The due date of the return required for the year of
death. Identifying number. Generally, this number is your U.S.
social security number (SSN). If you were never issued an
b. The time that the security provided for the property SSN, attach a statement explaining the reason.
fails to be adequate. See item (6) below.
5. You make the election in Part II, Section D. Part I—General Information
6. You must provide adequate security (such as a bond). This section is to be completed by all filers.
7. You must make an irrevocable waiver of any right
Line 1
under any treaty of the United States that would preclude
assessment or collection of any tax imposed by section If you have a P.O. box, enter your box number instead of your
877A. street address only if your post office does not deliver mail to
the street address.
When To File
Line 2
Attach your initial Form 8854 to your income tax return (Form
1040, 1040-SR, or 1040-NR) for the year that includes your Enter the information in the following order: street address,
expatriation date, and file your return by the due date of your city, province or state, and country. Follow the country's
tax return in accordance with filing instructions. If you are not practice for entering the postal code. Don't abbreviate the
required to file an income tax return, send your Form 8854 to country name.
the address under Where To File, later, by the date your Form
1040-NR (or Form 1040 or 1040-SR) would have been due Line 3
(including extensions) if you had been required to file. (See Enter the country of which you are considered a resident for
Resident Alien or Nonresident Alien in the Instructions for tax purposes if it is different from the country in which your
Form 1040-NR.) principal foreign residence is located.

File your annual Form 8854 if you expatriated before 2024 Line 4
and you:
Check the appropriate box to indicate whether you
1. Deferred the payment of tax on any property on a Form expatriated in 2024 and are filing your initial expatriation
8854 filed in a previous year, statement, or if you expatriated before 2024 (but after June
2. Reported an eligible deferred compensation item on a 16, 2008) and are filing an annual statement.
Form 8854 filed in a previous year, or
3. Reported an interest in a nongrantor trust on a Form Line 5
8854 filed in a previous year. Your expatriation date is the date you relinquish citizenship
(in the case of a former citizen) or terminate your long-term
See Part III, later. residency (in the case of a former U.S. resident). See Date of
For each year that you are required to file a Form 1040-NR relinquishment of U.S. citizenship or Date of termination of
(or Form 1040 or 1040-SR), attach your annual Form 8854 to long-term residency, earlier.
your Form 1040-NR (or Form 1040 or 1040-SR) and send a
copy, marked “Copy,” to the address under Where To File, Line 6
later. For each year that you are not required to file Form List all countries (including the United States) of which you
1040-NR (or Form 1040 or 1040-SR), send your Form 8854 are a citizen and the date, including by birth, on which you
to the address under Where To File, later, by the date your became a citizen.
Form 1040-NR (or Form 1040 or 1040-SR) would have been
due (including extensions) if you had been required to file a
Form 1040-NR (or Form 1040 or 1040-SR).

Instructions for Form 8854 (2024) 3

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Line 7 her child on October 31, 2024, and that she reported the gift
If you are a former U.S. citizen, check the appropriate box to on a federal gift tax return.
indicate how you became a U.S. citizen.
Line 4
Line 8a
If you are or were a U.S. lawful permanent resident, enter the Check the “Yes” box if you became at birth a U.S. citizen and
date on which you became a U.S. lawful permanent resident. a citizen of another country and, as of your expatriation
This is the date you were issued your green card. date, you continue to be a citizen of, and are taxed as a
resident of, that other country.
Line 8b
Enter the date you either: Line 6
1. Became subject to a final administrative order that you
abandoned your lawful permanent resident status (or, if such Check the “Yes” box if:
order has been appealed, the date of a final judicial order • You expatriated before you were age 18 / , and1 2
issued in connection with such administrative order); or • You have been a resident of the United States for not more
than 10 tax years before you expatriated. For the purpose of
2. Became subject to a final administrative or judicial
determining U.S. residency, use the substantial presence test
order for your removal from the United States under the
described in chapter 1 of Pub. 519.
Immigration and Nationality Act.
Line 8c Line 7
Enter the date you voluntarily abandoned your lawful
permanent resident status by filing Department of Homeland Check the “Yes” box if you have complied with your tax
Security Form I-407 with a U.S. consular or immigration obligations for the 5 tax years ending before the date on
officer. which you expatriated, including but not limited to, your
obligations to file income tax, employment tax, gift tax, and
Part II—Initial Expatriation Statement information returns, if applicable, and your obligation to pay
all relevant tax liabilities, interest, and penalties.
for Persons Who Expatriated in 2024
You will be subject to tax under section 877A if you
Section A—Expatriation Information ! have not certified your compliance with these
CAUTION obligations, regardless of whether your average
This section must be completed by all individuals who
annual income tax liability or net worth exceeds the
expatriated in 2024.
applicable threshold amounts.
Line 1
Section B—Balance Sheet
For each of the 5 tax years ending before the date of your The financial information in this balance sheet is required
expatriation, determine your total tax less any foreign tax under section 6039G. The balance sheet can be used to
credit. For 2023, use the amount shown on the 2023 Form arrive at your net worth.
1040, line 24, less any amount reported on the 2023 For purposes of determining your net worth, you are
Schedule 3 (Form 1040), line 1. considered to own any interest in property that would be
taxable as a gift under chapter 12 of subtitle B of the Code
Line 2 had you transferred it immediately prior to expatriation, but
without regard to sections 2503(b) through (g), 2513, 2522,
You can use the Part II, Section B, balance sheet to 2523, and 2524. To determine the value of your interests in
determine your net worth. property, use the valuation principles of section 2512 and the
regulations thereunder.
Line 3
Columns (a) and (b)
Check the “Yes” box if there have been significant changes in
your assets and liabilities during the 5 years preceding your List in U.S. dollars the FMV (column (a)) and the U.S.
expatriation date. If your net worth was $2 million or more at adjusted basis (column (b)) of your assets and liabilities as of
any point during the 5 years preceding your expatriation date your expatriation date.
but was less than $2 million on your expatriation date, there
have been significant changes in your assets and liabilities. You can use good-faith estimates of FMV and basis.
You must attach a statement to Form 8854 that explains the Formal appraisals are not required.
changes.
Example. During the 5 years preceding her expatriation Line 5a
date, Maria’s net worth exceeded $2 million. However, after
Maria made a gift of real property to her child on October 31, List the appropriate amount in each column for all
2024, Maria’s net worth decreased such that it was less than nonmarketable stock and securities issued by foreign
$2 million on her expatriation date. Maria reported the gift on corporations that would be controlled foreign corporations if
a federal gift tax return. Maria must check the “Yes” box. you were still a U.S. citizen or resident. Note that these
Maria must also attach a statement that explains that her net amounts are already included on line 5. Don't include
worth decreased because she made a gift of real property to amounts on this line in the total on line 20.

4 Instructions for Form 8854 (2024)

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Line 6 Line 19

List in U.S. dollars the present value of your U.S. and foreign Attach a statement describing and listing the total value of
pensions or similar retirement arrangements as of your any other assets you have that aren't included on lines 1
expatriation date. through 18.

Line 7 Line 20

List in U.S. dollars the present value of your deferred Combine lines 1 through 5 and 6 through 19, not including
compensation, including any stock options, as of your any amounts on line 5a. The amounts on line 5a are included
expatriation date. The present value should include all in determining the amounts on line 5.
deferred compensation, regardless of where you performed
services. Line 23

Line 8 Attach a statement describing and listing the total value of
any other liabilities you have that aren't included on lines 21
List the total value of all your partnership interests. If you hold and 22.
an interest in one or more partnerships, you must attach a
Section C—Property Owned on Date of
statement to Form 8854 that lists each partnership
separately. Include the employer identification number (EIN), Expatriation
if any, for each partnership. Describe the assets and liabilities Complete Section C only if you are a covered expatriate (see
(using the categories on this balance sheet) from your Covered expatriate, earlier). If you need additional space for
interest in each partnership. the description of property, or if you need additional entry
lines, attach a statement.
Line 9
Line 1
For purposes of determining your net worth, you are
considered to own assets held in trusts that would be subject None of the amounts checked on line 1 are subject to the
to U.S. gift tax if you had transferred your interests in the mark-to-market tax. Don't include them on line 2. Instead,
trusts by gift immediately before your expatriation date, but you must attach a statement to the form that separately
without regard to sections 2503(b) through (g), 2513, 2522, identifies each amount checked on line 1 as of the day before
2523, and 2524. List the total FMV and basis of such your expatriation date.
property on line 9. Attach a statement to Form 8854 Some of these amounts may otherwise be taxable or
describing each asset. Include the EIN (if any) for the trust in TIP subject to income tax withholding at source. You
which the asset is held. must provide Form W-8CE to the payor of the
relevant items. See paragraphs (d), (e), and (f) of section
Line 10 877A for more information.

List the total value of all of your beneficial interests in trusts to Line 1a. Generally, a deferred compensation item is one of
the extent not included on line 9. You must attach a statement the following.
to Form 8854 that lists each trust separately. Include the EIN 1. Any interest in a plan or arrangement described in
(if any) for each trust. Describe the assets and liabilities section 219(g)(5). This includes a qualified pension,
(using the categories on this balance sheet) from your profit-sharing (including 401(k)), annuity, SEP, and SIMPLE
interest in each trust of which you have a beneficial interest. plan.
2. Any interest in a foreign pension plan or similar
Note. To determine the value of your beneficial interest, use retirement arrangement or program.
the two-step process described in section III of Notice 97-19
which is on page 40 of Internal Revenue Bulletin 1997-10 at 3. Any item of deferred compensation, whether or not
IRS.gov/pub/irs-irbs/irb97-10.pdf. substantially vested. This is any amount of compensation if,
under the terms of the plan, contract, or other arrangement
providing for such compensation, the following conditions
Lines 11 and 12 were met.
a. You had a legally binding right on your expatriation
Intangible property includes any of the following items that
date to such compensation.
have substantial value independent of the services of any
individual. b. The compensation has not been actually or
• Patent, invention, formula, process, design, pattern, or constructively received on or before your expatriation date.
know-how. c. The compensation is payable on or after your
• Copyright, literary, musical, or artistic composition. expatriation date.
• Trademark, trade name, or brand name. Examples of items of deferred compensation include a
• Franchise, license, or contract. cash-settled stock appreciation right, a phantom stock
• Method, program, system, procedure, campaign, survey, arrangement, a cash-settled restricted stock unit, an
study, forecast, estimate, customer list, or technical data. unfunded and unsecured promise to pay money or other
• Any similar item. compensation in the future (other than such a promise to
transfer property in the future), and an interest in a trust

Instructions for Form 8854 (2024) 5

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described in section 402(b)(1) or (4) (commonly referred to 3. A qualified ABLE program,
as a “secular trust”). 4. A Coverdell education savings account,
4. Any property, or right to property, that you are entitled 5. A health savings account, and
to receive in connection with the performance of services
(whether or not such property or right to property is 6. An Archer medical savings account.
substantially vested) to the extent not previously taken into The amount of your entire interest in your specified tax
account under section 83 or in accordance with section 83. deferred account on the day before your expatriation date
Examples of these items include, but are not limited to, must be included on your Form 1040 or 1040-SR, or other
restricted stock, stock-settled stock appreciation rights, and schedule, for the portion of your tax year that includes your
stock-settled restricted stock units. expatriation date. For more information, see section 6 of
Notice 2009-85, 2009-45 I.R.B. 598, available at IRS.gov/irb/
Note. A deferred compensation item does not include the 2009-45_IRB#NOT-2009-85.
portion of an item that is attributable to services performed
outside the United States while you were not a citizen or Note. If you have one or more specified tax deferred
resident of the United States. For more information, see accounts, you must attach a statement to the form that
section 5 of Notice 2009-85, available at IRS.gov/irb/ separately identifies each specified tax deferred account and
2009-45_IRB#NOT-2009-85. provides the entire account balance of each specified tax
“Eligible deferred compensation item” means any deferred deferred account on the day before your expatriation date.
compensation item with respect to which: Line 1d. A nongrantor trust is the part of any trust, whether
• The payor is either a U.S. person or a non-U.S. person who domestic or foreign, of which you were not considered the
elects to be treated as a U.S. person for purposes of section owner under sections 671 through 679 on the day before
877A(d)(1), your expatriation date. You are considered a beneficiary of
• The covered expatriate notifies the payor of their status as such trust if:
a covered expatriate on Form W-8CE, and
• The covered expatriate irrevocably waives any right to 1. You are entitled or permitted, under the terms of the
claim any withholding reduction on such item under any trust instrument or applicable local law, to receive a direct or
treaty with the United States on Form 8854. indirect distribution of trust income or corpus (including, for
example, a distribution in discharge of an obligation);
The Secretary may provide separate guidance providing a
procedure for a payor who is a non-U.S. person and wishes 2. You have the power to apply trust income or corpus for
to elect to be treated as a U.S. person for purposes of section your own benefit; or
877A(d)(1). 3. You could be paid from the trust income or corpus if
the trust or the current interests in the trust were terminated.
You must file Form 8854 annually to certify that no
! distributions have been received from your eligible Unless you elect to be treated as having received the
CAUTION deferred compensation item(s) or to report the value of your interest in the trust, as determined for purposes
distributions you received. of section 877A, as of the day before your expatriation date,
you cannot claim a reduction in withholding on any
Note. If you have one or more eligible deferred distribution from the trust under any treaty with the United
compensation items, you must attach a statement to the form States. Before you can make the election, you must get a
that separately identifies each eligible deferred letter ruling from the IRS as to the value, if ascertainable, of
compensation item and includes the following language for your interest in the trust as of the day before your expatriation
each item: “I irrevocably waive any right to claim any date by following the procedures set forth in Rev. Proc.
reduction in withholding for this eligible deferred 2024-1, 2024-1 I.R.B. 1, available at IRS.gov/irb/
compensation item under any treaty with the United States.” 2024-01_IRB#RP-2024-01 . You must make this election by
checking the box under line 1d of this form and attaching a
Line 1b. “Ineligible deferred compensation item” means any copy of the letter ruling both to this form and to your timely
deferred compensation item that is not an eligible deferred filed tax return (including extensions) for the 2024 tax year.
compensation item. The amount of this deferred Until you obtain the valuation letter ruling and provide a copy
compensation item (the present value of the accrued benefit) of such letter ruling to the trustee of the nongrantor trust
must be included on your Form 1040 or 1040-SR, or other together with certification, under penalties of perjury, that you
schedule, for the portion of your tax year that includes your have paid all tax due as a result of your election, any taxable
expatriation date. For more information, see section 5D of distributions that you receive from the trust will be subject to
Notice 2009-85, 2009-45 I.R.B. 598, available at IRS.gov/irb/ 30% withholding.
2009-45_IRB#NOT-2009-85.
If you are a beneficiary of a nongrantor trust, you
Note. If you have one or more ineligible deferred ! must file Form 8854 annually to certify that no
compensation items, you must attach a statement to the form CAUTION distributions have been received or to report the
that separately identifies each ineligible deferred distributions you received.
compensation item and provides the present value of such
ineligible deferred compensation item as of the day before Note. If you are a beneficiary of one or more nongrantor
your expatriation date. trusts, you must attach a statement to the form that
Line 1c. A specified tax deferred account includes: separately identifies each trust and includes one of the
following statements for each trust.
1. An individual retirement plan (except those described
in section 408(k) or 408(p)), 1. “I waive any right to claim any reduction in withholding
on any distribution from such trust under any treaty with the
2. A qualified tuition program, United States.”

6 Instructions for Form 8854 (2024)

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2. “I elect under section 877A(f)(4)(B) to be treated as must allocate the exclusion amount, as adjusted, to the gain
having received the value of my entire interest in the trust (as properties under the method described above. The exclusion
determined for purposes of section 877A) as of the day amount allocated to each gain property can’t exceed the
before my expatriation date. I attach a copy of my valuation amount of that gain property's built-in gain.
letter ruling issued by the IRS.” See Notice 2009-85, section 3B, for more information.
Example. Xavier, a covered expatriate, renounced his
Line 2 citizenship on Date 2. On Date 1, the day before Xavier's
Column (a). An interest in property includes money or other renunciation of his citizenship, he owned three assets, which
property, regardless of whether it produces any income or he had owned for more than 1 year. Asset A is business
gain. In addition, an interest in the right to use property will be property and Assets B and C are personal property. As of
treated as an interest in such property. However, do not list Date 1, Asset A had an FMV of $2,000,000 and an adjusted
the following. basis of $200,000; Asset B had an FMV of $1,000,000 and
an adjusted basis of $800,000; and Asset C had an FMV of
1. Deferred compensation items. $500,000 and an adjusted basis of $800,000. Xavier must
2. Specified tax deferred accounts. allocate the exclusion amount as follows.
3. Interests in nongrantor trusts. Step 1: Determine the built-in gain or loss of each asset by
You are considered to own any interest in property that subtracting the adjusted basis from the FMV of the asset on
would be included in your gross estate for federal estate tax Date 1.
purposes under chapter 11 of subtitle B of the Code if you
died on the day before your expatriation date as a citizen or Basis FMV Built-in Gain/Loss
resident of the United States. For more information on gross Asset A 200,000 2,000,000 1,800,000
estate, see section 2103. Whether property would be Asset B 800,000 1,000,000 200,000
included in your gross estate will be determined without Asset C 800,000 500,000 (300,000)
regard to sections 2010 through 2016. For this purpose, you
are considered to own your beneficial interest(s) in each trust
(or part of a trust), other than a nongrantor trust subject to Step 2: Allocate the exclusion amount to each of the gain
section 877A(f), that would not be included in your gross properties by multiplying the exclusion amount ($866,000) by
estate as described in the preceding sentences. Your a ratio of the deemed gain attributable to each gain property
beneficial interest(s) in such a trust shall be determined over the total gain of all the gain properties deemed sold.
under the special rules set forth in section III of Notice 97-19,
which is on page 40 of Internal Revenue Bulletin 1997-10 at Asset A
IRS.gov/pub/irs-irbs/irb97-10.pdf.
Column (b). Use the FMV on the day before your 1,800,000
expatriation date. FMV is the price at which the property × 866,000 = 779,400
2,000,000
would change hands between a buyer and a seller when both
have reasonable knowledge of all the necessary facts and Asset B
neither has to buy or sell. If parties with adverse interests
place a value on property in an arm's-length transaction, that 200,000
is strong evidence of the FMV. 2,000,000 × 866,000 = 86,600
Column (c). Generally, the cost or other basis in this column
cannot be less than the FMV of the property on the date you
first became a U.S. resident. However, if you are a naturalized Step 3: Figure the final amount of deemed gain on each
citizen or an LTR at the time you expatriated, you can make asset by subtracting the exclusion amount allocated to each
an irrevocable election under section 877A(h)(2) to asset.
determine basis without regard to this restriction. Print “(h)
(2)” after any entry for which you make this election. Asset A: 1,800,000 − 779,400 = 1,020,600
Column (e). Before you complete column (e), you must Asset B: 200,000 − 86,600 = 113,400
allocate the exclusion amount to the gain properties on a
separate schedule. Attach a copy of the separate schedule to
Xavier will recognize in Section C, line 2, column (e) the
this form. To allocate the exclusion amount, determine the
resulted gain from Asset A and Asset B in the amounts of
gain of each gain property listed in column (a) and enter that
$1,020,600 and $113,400, respectively. In addition, Xavier
gain in column (d). If the total gain of all the gain properties
must report the loss with respect to Asset C on Form 1040 for
exceeds the exclusion amount ($866,000 for 2024), then
the portion of Xavier's tax year that includes the day before
allocate the entire exclusion amount to the gain properties by
the expatriation date, as provided in Regulations section
multiplying the exclusion amount by the ratio of the gain
1.6012-1(b)(2)(ii)(b).
determined for each gain property in column (d) over the total
gain of all gain properties listed in column (d). After you have Column (f). Complete this column in order to list the
allocated the exclusion amount to the gain properties, schedule or form on which you reported the deemed sale of
subtract the exclusion amount allocated to each gain each property listed in column (a) (for example, Form 4797 or
property from the gain reported for that property in column Form 8949).
(d), and enter the resulting amount of gain in column (e). If Column (g). Complete this column only for those properties
the total gain of the gain properties in column (d) is less than for which you are electing to defer the payment of tax. First,
the exclusion amount (but greater than -0-), then you must complete Section D to line 4. On a separate attachment,
use the total gain amount as the exclusion amount, and you

Instructions for Form 8854 (2024) 7

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allocate the amount of tax eligible for deferral among all gain Section C, line 2, column (e), and report the loss amount
properties listed on Section C, line 2. The tax attributable to a attributable to each particular property as listed in Section C,
particular property is determined by multiplying the amount line 2, column (d).
on Section D, line 4, by the ratio of the gain for that property
entered in Section C, line 2, column (e), over the total amount If you are electing to defer tax, go to line 2.
of gain of all gain properties on Section C, line 2. This is the
total amount of gain of all properties listed individually in Line 2
Section C, line 2, column (e), combined as an aggregate
figure. In Section C, line 2, column (g), enter the tax Enter on line 2 the amount of tax on line 24 of the first
attributable to each property for which you are electing to hypothetical return, which includes all income, including the
defer tax. Then, enter the total deferred tax for those section 877A(a) gain and loss.
properties from Section C, line 4, column (g), on Section D,
line 5.
Line 3
Example. Section C, line 2, lists four assets, each
resulting in a deemed gain in column (d). The amount of tax Enter on line 3 the amount of tax on line 24 of the second
eligible for deferral on Section D, line 4, is $575,000. You hypothetical return, which includes all income except the
must go back to line 2, column (g), to allocate the deferred section 877A(a) gain and loss.
tax among the individual properties.
You must attach a computation to show how you Line 5
! figured the tax attributable to each property.
CAUTION This is the amount of tax you elect to defer. If you are
See Section D, later, and Notice 2009-85, section 3E, for deferring tax on all properties, enter the amount from
more information on deferring the payment of tax. Section D, line 4. If you are electing deferral on only certain
properties, go to Section C, line 2, column (g), to show how
Note. The address listed in section 3E of Notice 2009-85 for much deferred tax is allocated to each property. Attach a
mailing your tax deferral agreement is no longer valid. See computation.
Procedure for requesting a deferral of the payment of tax, Procedure for requesting a deferral of the payment of
later, for the correct address. tax. In order to defer any part of the mark-to-market tax, you
Reporting gain or loss. You must report and recognize the must enter into a tax deferral agreement with the IRS and
gain (or loss) of each property reported in Section C, line 2, provide adequate security. Notice 2009-85 contains a sample
column (a), on the relevant form or schedule of your Form agreement (Appendix A). Adequate security can be either:
1040 or 1040-SR for the part of the year that includes the day 1. A bond that is furnished to, and accepted by, the IRS,
before your expatriation date. The return to which you attach that is conditioned on the payment of tax (and interest
your form or schedule will depend on your status at the end of thereon), and that meets the requirements of section 6325; or
the year. See chapter 1 of Pub. 519 to determine which form 2. Another form of security (including letters of credit) that
you should file. The gain from column (e) or loss from column is acceptable to the IRS.
(d) attributable to each property is reported in the same
manner as if the property had actually been sold. For In order to make a deferral election, a covered expatriate
example, gain recognized from the deemed sale of a rental must appoint a U.S. person to act as the covered expatriate's
property that has been depreciated is reported on Form 4797 limited agent for accepting communication related to the tax
as if it had been sold. Gain recognized from the deemed sale deferral agreement from the IRS on behalf of the covered
of personal property (such as stock or a personal residence) expatriate.
is reported on Form 8949 as if it had been sold. Capital gain You must send your original tax deferral agreement
retains its character as capital gain; ordinary gain retains its request, marked “Original,” with your Form 8854 for the year
character as ordinary income. that includes your expatriation date to:
Section D—Deferral of Tax Internal Revenue Service
If you expatriated in 2024, and you chose to enter into a tax 3651 S IH35
deferral agreement with the IRS with respect to assets MS 4301 AUSC
subject to the mark-to-market rules of section 877A, use lines Austin, TX 78741
2 through 5 of Section D to figure the amount of tax you can
defer. Before completing lines 2 through 5 of Section D, you If you are required to file a Form 1040, 1040-SR, or
must fill out two hypothetical individual income tax returns 1040-NR for the year that includes your expatriation date,
using Form 1040 or 1040-SR. The first return includes all also attach a copy of the tax deferral agreement request,
income, including the section 877A(a) gain and loss. The marked “Copy,” to the Form 8854 that you include with your
second return includes all income except the section 877A(a) tax return.
gain and loss. Attach both hypothetical returns to this Form
8854. Note. The address listed in section 3E of Notice 2009-85 is
no longer valid.
Line 1 If the IRS deems your collateral sufficient, and agrees to
enter into a tax deferral agreement, you can pay any tax
If you aren't electing to defer the payment of tax on the gain deferred, together with interest, at any time. However, the
reported in Section C, line 2, column (e), report on the time for the payment of tax attributable to a particular deferral
appropriate income tax return schedule or form the gain asset can be extended only until (a) the year the asset is
amount attributable to each particular property as listed in ultimately disposed of, or (b) the year of death.

8 Instructions for Form 8854 (2024)

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You must file Form 8854 annually for years up to and you continued to be subject to tax as a U.S. citizen or
! including the year in which the full amount of deferred resident. Also enter the total amount of tax withheld by the
CAUTION tax and interest is paid. payor(s) of any eligible deferred compensation items.
Waiver of treaty benefits. As a further condition to Don't enter the part of any payment that is
making the election to defer the payment of tax on a ! attributable to services performed outside the United
particular asset, you must waive any right under any U.S. tax CAUTION States before or after your expatriation date while you
treaty that would preclude the assessment or collection of the weren't a citizen or resident of the United States.
tax.
Satisfying your deferred tax liability. If you entered into Line 3
an agreement for the deferral of tax with the IRS and dispose Unless the exception at the end of this section applies, check
of one or more assets for which you elected to defer tax, you the “Yes” box if you received any direct or indirect
must contact the IRS to make arrangements to satisfy your distributions of property (including money) from a nongrantor
tax liability. The address is shown above. trust in 2024. Enter the part of the distribution that you would
include in gross income if you continued to be subject to tax
Part III—Annual Expatriation as a U.S. citizen or resident. Also enter the total amount of
Statement for Persons Who tax withheld by the payor(s) of any distribution.
Don't include any distribution from a trust if your
Expatriated Before 2024
interest in the trust was treated in an earlier year as a
You must file Part III if you: CAUTION! deferred compensation item or part of a specified tax
1. Deferred the payment of tax on any property on a Form deferred account.
8854 filed in a previous year,
2. Reported an eligible deferred compensation item on a Exception. Don't check the “Yes” box if you elected on a
Form 8854 filed in a previous year, or previously filed Form 8854 to be treated as having received
the value of your entire interest in the trust as of the day
3. Reported an interest in a nongrantor trust on a Form before your expatriation date.
8854 filed in a previous year.
Signature
Line 1
Form 8854 is not considered valid unless you sign it. If you
If you deferred the payment of tax in an earlier year, refer to have someone else prepare Form 8854, you are still
the Form 8854 you filed for that earlier year to complete responsible for its correctness.
columns (a), (b), and (c). If you expatriated in 2019 or later,
use the information from Part II, Section C, line 2. If you Paid preparers. Generally, anyone you pay to prepare Form
expatriated in 2018 or earlier, use the information from Part 8854 must sign it and include a preparer tax identification
III, line 1, of the earlier year's Form 8854. number (PTIN) in the space provided. The preparer must
give you a copy for your records. Someone who prepares
If you disposed of any property in 2024 on which you Form 8854 but does not charge you a fee should not sign it.
deferred the payment of tax on a previous return, also
complete column (d). You must report the gain or loss from Paperwork Reduction Act Notice. We ask for the
the property disposed of on the appropriate line (or schedule) information on this form to carry out the Internal Revenue
of your income tax return. laws of the United States. You are required to give us the
You must pay the deferred tax, plus interest, on any information. We need it to ensure that you are complying with
these laws and to allow us to figure and collect the right
! property you disposed of, no later than the due date
CAUTION (without extensions) of your 2024 income tax return. amount of tax.
See Satisfying your deferred tax liability, earlier, for
information on arranging payment. You are not required to provide the information requested
on a form that is subject to the Paperwork Reduction Act
See Section D under Part II, earlier, and section 3E of unless the form displays a valid OMB control number. Books
Notice 2009-85 for more information on deferring the tax. or records relating to a form or its instructions must be
retained as long as their contents may become material in the
Note. The address listed in section 3E of Notice 2009-85 for administration of any Internal Revenue law. Generally, tax
mailing your tax deferral agreement is no longer valid. See returns and return information are confidential, as required by
Procedure for requesting a deferral of the payment of tax section 6103.
under Section D, earlier, for the correct address.
The average time and expenses required to complete and
Line 2 file this form will vary depending on individual circumstances.
Check the “Yes” box if you received any distributions of For the estimated averages, see the instructions for your
eligible deferred compensation items in 2024. Enter the part income tax return.
of the distribution that you would include in gross income if

Instructions for Form 8854 (2024) 9

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