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Department of the Treasury
Internal Revenue Service
2023

Instructions for Form 8854

Initial and Annual Expatriation Statement

Section references are to the Internal Revenue Code unless long-term resident (LTR), defined below, and terminated your
otherwise noted. residency in 2023.
Future Developments You must file your annual Form 8854 (Parts I and III) if you
For the latest information about developments related to expatriated before 2023 and you:
Form 8854 and its instructions, such as legislation enacted 1. Deferred the payment of tax,
after they were published, go to IRS.gov/Form8854. 2. Have an item of eligible deferred compensation, or
What's New 3. Are a beneficiary of a nongrantor trust.
Increase in average annual net income tax liability. The Expatriation. Expatriation includes the acts of relinquishing
average annual net income tax liability for the 5 tax years U.S. citizenship and terminating long-term residency.
ending before your expatriation date, which is used to Date of relinquishment of U.S. citizenship. You are
determine whether an individual is a covered expatriate, has considered to have relinquished your U.S. citizenship (and
increased to $190,000. For more information, see Covered consequently, have an expatriation date) on the earliest of the
expatriate, later. following dates.
Increase in threshold for net unrealized gain on proper- 1. The date you renounced your U.S. citizenship before a
ty. For 2023, if you are a covered expatriate, the net gain diplomatic or consular officer of the United States (provided
that you must otherwise include in your income is reduced by that the voluntary renouncement was later confirmed by the
$821,000. For more information, see Taxation Under Section issuance of a certificate of loss of nationality).
877A, later. 2. The date you furnished to the State Department a
signed statement of your voluntary relinquishment of a U.S.
General Instructions nationality confirming the performance of an expatriating act
(provided that the voluntary relinquishment was later
Purpose of Form confirmed by the issuance of a certificate of loss of
nationality).
Section 877A applies to U.S. citizens who have relinquished
their citizenship and long-term residents who have ended 3. The date the State Department issued a certificate of
their residency (expatriated) on or after June 17, 2008. loss of nationality.
4. The date a U.S. court canceled your certificate of
Form 8854 is used by expatriates to certify compliance naturalization.
with tax obligations in the 5 years before expatriation and to
comply with their initial and annual information reporting Long-term resident (LTR) defined. You are an LTR if you
obligations under section 6039G. were a lawful permanent resident of the United States in at
least 8 of the last 15 tax years ending with the year you are
Note. Individuals who expatriated for immigration purposes no longer treated as a lawful permanent resident. In
after June 3, 2004, and before June 17, 2008, but who have determining if you meet the 8-year requirement, don't count
not previously filed a Form 8854, continue to be treated as any year if in that year you were treated as a resident of a
U.S. citizens or U.S. lawful permanent residents for U.S. foreign country under a tax treaty and did not waive treaty
income tax purposes until they file a Form 8854. See section benefits applicable to residents of that country.
7701(n), as in effect before June 17, 2008. Lawful permanent resident. You are a lawful permanent
Individuals in this category are subject to section 877 once resident of the United States if you have been given the
they file the Form 8854. These individuals should use the privilege, according to U.S. immigration laws, of residing
2018 Form 8854 and the Instructions for Form 8854 (but permanently in the United States as an immigrant. You
modify the year on the form by crossing out 2018 and generally have this status if you have been issued an alien
entering the year of actual filing) for purposes of filing their registration card, also known as a green card, and your green
initial and/or annual expatriation statements pursuant to card hasn't been revoked or judicially or administratively
section 877 going forward. determined to have been abandoned. However, you are also
Individuals who expatriated before June 17, 2008, who no longer treated as a lawful permanent resident if you (1)
have previously filed a Form 8854, but who still have an commenced to be treated as a resident of a foreign country
annual reporting requirement in 2023 under section 877, under the provisions of a tax treaty, (2) did not waive the
should also use the 2018 Form 8854 but modify the year on benefits of such treaty, and (3) notified the IRS of the
the form by crossing out 2018 and entering 2023. commencement of such treatment. See Regulations section
301.7701(b)-7 for information on related filing requirements.
Date of termination of long-term residency. If you were
Who Must File
an LTR, you terminated your lawful permanent residency
(and consequently, have an expatriation date) on the earliest
You must file your initial Form 8854 (Parts I and II) if you of the following dates.
relinquished your U.S. citizenship in 2023 or you are a

Aug 10, 2023 Cat. No. 24874E

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1. The date you voluntarily abandoned your lawful your U.S. income tax and reporting requirements in order to
permanent resident status by filing Department of Homeland avoid being treated as a covered expatriate under section
Security Form I-407 with a U.S. consular or immigration 877A, you may qualify for certain relief procedures. See
officer. IRS.gov/Individuals/International-Taxpayers/Relief-
2. The date you became subject to a final administrative Procedures-for-Certain-Former-Citizens.
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
3. The date you became subject to a final administrative $10,000 for that year, unless it is shown that such failure is
or judicial order for your removal from the United States due to reasonable cause and not willful neglect.
under the Immigration and Nationality Act.
4. If you were a dual resident of the United States and a Taxation Under Section 877A
country with which the United States has an income tax If you are a covered expatriate in the year you expatriate, you
treaty, the date on which you commenced to be treated as a are subject to income tax on the net unrealized gain in your
resident of that country under the treaty, did not waive the property as if the property had been sold for its fair market
benefits of the treaty, and gave notice to the IRS of the value (FMV) on the day before your expatriation date
commencement of such treatment. See Regulations section (“mark-to-market tax”). This applies to most types of property
301.7701(b)-7 for information on related filing requirements. interests you held on the date of your expatriation. But see
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)
$190,000. doesn't apply. For 2023, 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. $821,000.
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
subject to the expatriation tax) solely because one or both of 4. Interests in nongrantor trusts.
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
Certain minors. You can qualify for the exception include this amount on your Form 1040 or 1040-SR for the
described above if you meet both of the following year that includes your expatriation date. See paragraphs (d),
requirements. (e), and (f) of section 877A.
• You expatriated before you were 18 / .1 2
• You were a resident of the United States for not more than Item (4) is subject to withholding, and you are treated as
10 tax years before you expatriated. For the purpose of having waived any right to claim any reduction in withholding
determining U.S. residency, use the substantial presence test under an applicable treaty between the United States and
described in chapter 1 of Pub. 519. your country of residence, unless you elect to be treated as
having received the value of your entire interest in the trust by
Note. If you have relinquished or intend to relinquish your obtaining a ruling from the IRS to that effect. See Section C
U.S. citizenship, and you wish to come into compliance with under Part II, later.

-2- Instructions for Form 8854 (2023)

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Deferral of the payment of mark-to-market tax. You can 3. If you elected to defer the payment of any tax due, see
make an irrevocable election to defer the payment of the the instructions under Part II, Section D, Line 5, later, and
mark-to-market tax imposed on the deemed sale of property. send your tax deferral agreement request to the address
If you make this election, the following rules apply. listed below.
1. You make the election on a property-by-property basis. Internal Revenue Service
2. The deferred tax on a particular property is due on the 3651 S IH35
return for the tax year in which you dispose of the property. MS 4301AUSC
3. Interest is charged for the period the tax is deferred. Austin, TX 78741
4. The due date for the payment of the deferred tax
cannot be extended beyond the earlier of the following dates. Note. If you were a U.S. person for any portion of 2023, you
may be required to file Financial Crimes Enforcement
a. The due date of the return required for the year of Network (FinCEN) Form 114, Report of Foreign Bank and
death. Financial Accounts (FBAR). In addition, you may be required
b. The time that the security provided for the property to file Form 8938, Statement of Specified Foreign Financial
fails to be adequate. See item (6) below. Assets. For more information, go to IRS.gov/FBAR.
5. You make the election in Part II, Section D.
6. You must provide adequate security (such as a bond). Specific Instructions
7. You must make an irrevocable waiver of any right Identifying number. Generally, this number is your U.S.
under any treaty of the United States that would preclude social security number. If you were never issued a social
assessment or collection of any tax imposed by section security number, attach a statement explaining the reason.
877A.
Part I—General Information
When To File This section is to be completed by all filers.
Attach your initial Form 8854 to your income tax return (Form
1040, 1040-SR, or 1040-NR) for the year that includes your Line 1
expatriation date, and file your return by the due date of your If you have a P.O. box, enter your box number instead of your
tax return (including extensions). Also send a copy of your street address only if your post office does not deliver mail to
Form 8854, marked “Copy,” to the address under Where To the street address.
File, later. If you are not required to file an income tax return,
send your Form 8854 to the address under Where To File, Line 2
later, by the date your Form 1040-NR (or Form 1040 or Enter the information in the following order: street address,
1040-SR) would have been due (including extensions) if you city, province or state, and country. Follow the country's
had been required to file. (See Resident Alien or Nonresident practice for entering the postal code. Don't abbreviate the
Alien in the Instructions for Form 1040-NR.) country name.
File your annual Form 8854 if you expatriated before 2023
Line 3
and you:
Enter the country of which you are considered a resident for
1. Deferred the payment of tax on any property on a Form
tax purposes if it is different from the country in which your
8854 filed in a previous year,
principal foreign residence is located.
2. Reported an eligible deferred compensation item on a
Form 8854 filed in a previous year, or Line 4
3. Reported an interest in a nongrantor trust on a Form Check the appropriate box to indicate whether you
8854 filed in a previous year. expatriated in 2023 and are filing your initial expatriation
statement, or if you expatriated before 2023 (but after June
See Part III, later.
16, 2008) and are filing an annual statement.
For each year that you are required to file a Form 1040-NR
(or Form 1040 or 1040-SR), attach your annual Form 8854 to Line 5
your Form 1040-NR (or Form 1040 or 1040-SR) and send a Your expatriation date is the date you relinquish citizenship
copy, marked “Copy,” to the address under Where To File, (in the case of a former citizen) or terminate your long-term
later. For each year that you are not required to file Form residency (in the case of a former U.S. resident). See Date of
1040-NR (or Form 1040 or 1040-SR), send your Form 8854 relinquishment of U.S. citizenship or Date of termination of
to the address under Where To File, later, by the date your long-term residency, earlier.
Form 1040-NR (or Form 1040 or 1040-SR) would have been
due (including extensions) if you had been required to file a Line 6
Form 1040-NR (or Form 1040 or 1040-SR). List all countries (including the United States) of which you
are a citizen and the date, including by birth, on which you
Where To File became a citizen.
1. Send your original initial or annual Form 8854 to the
address listed below. Line 7
2. If you are required to attach the original Form 8854 to a If you are a former U.S. citizen, check the appropriate box to
Form 1040-NR, 1040, or 1040-SR, send a copy of your initial indicate how you became a U.S. citizen.
or annual Form 8854, marked “Copy,” to the address listed
below.

Instructions for Form 8854 (2023) -3-

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Line 8a information returns, if applicable, and your obligation to pay
If you are or were a U.S. lawful permanent resident, enter the all relevant tax liabilities, interest, and penalties.
date on which you became a U.S. lawful permanent resident. You will be subject to tax under section 877A if you
This is the date you were issued your green card. ! have not certified your compliance with these
CAUTION obligations, regardless of whether your average
Line 8b annual income tax liability or net worth exceeds the
Enter the date you either: applicable threshold amounts.
1. Became subject to a final administrative order that you
abandoned your lawful permanent resident status (or, if such Section B—Balance Sheet
order has been appealed, the date of a final judicial order The financial information in this balance sheet is required
issued in connection with such administrative order); or under section 6039G. The balance sheet can be used to
2. Became subject to a final administrative or judicial arrive at your net worth.
order for your removal from the United States under the
Immigration and Nationality Act. For purposes of determining your net worth, you are
considered to own any interest in property that would be
Line 8c taxable as a gift under chapter 12 of subtitle B of the Code
had you transferred it immediately prior to expatriation, but
Enter the date you voluntarily abandoned your lawful without regard to sections 2503(b) through (g), 2513, 2522,
permanent resident status by filing Department of Homeland 2523, and 2524. To determine the value of your interests in
Security Form I-407 with a U.S. consular or immigration property, use the valuation principles of section 2512 and the
officer. regulations thereunder.
Part II—Initial Expatriation Statement Note. If there have been significant changes in your assets
for Persons Who Expatriated in 2023 and liabilities for the period that began 5 years before your
expatriation and ended on the date that you first filed Form
Section A—Expatriation Information 8854, you must attach a statement explaining the changes.
This section must be completed by all individuals who
expatriated in 2023. Columns (a) and (b)

Line 1 List in U.S. dollars the FMV (column (a)) and the U.S.
adjusted basis (column (b)) of your assets and liabilities as of
your expatriation date.
For each of the 5 tax years ending before the date of your
expatriation, determine your total tax less any foreign tax You can use good faith estimates of FMV and basis.
credit. For 2022, use the amount shown on the 2022 Form Formal appraisals are not required.
1040, line 24, less any amount reported on Schedule 3 (Form
1040), line 1.
Line 5a

Line 2 List the appropriate amount in each column for all
nonmarketable stock and securities issued by foreign
You can use the Part II, Section B, balance sheet to corporations that would be controlled foreign corporations if
determine your net worth. you were still a U.S. citizen or resident. Note that these
amounts are already included on line 5. Don't include
Line 3 amounts on this line in the total on line 20.

Check the “Yes” box if you became at birth a U.S. citizen and Line 6
a citizen of another country and, as of your expatriation
date, you continue to be a citizen of, and are taxed as a List in U.S. dollars the present value of your U.S. and foreign
resident of, that other country. pensions or similar retirement arrangements as of your
expatriation date.
Line 5
Line 7
Check the “Yes” box if:
• You expatriated before you were 18 / , and1 2 List in U.S. dollars the present value of your deferred
• You have been a resident of the United States for not more compensation, including any stock options, as of your
than 10 tax years before you expatriated. For the purpose of expatriation date. The present value should include all
determining U.S. residency, use the substantial presence test deferred compensation, regardless of where you performed
described in chapter 1 of Pub. 519. services.

Line 6 Line 8

Check the “Yes” box if you have complied with your tax List the total value of all your partnership interests. If you hold
obligations for the 5 tax years ending before the date on an interest in one or more partnerships, you must attach a
which you expatriated, including but not limited to, your statement to Form 8854 that lists each partnership
obligations to file income tax, employment tax, gift tax, and separately. Include the employer identification number (EIN),

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if any, for each partnership. Describe the assets and liabilities Section C—Property Owned on Date of
(using the categories on this balance sheet) from your Expatriation
interest in each partnership.
Complete Section C only if you are a covered expatriate (see
Covered expatriate, earlier). If you need additional space for
Line 9 the description of property, or if you need additional entry
lines, attach a statement.
For purposes of determining your net worth, you are
considered to own assets held in trusts that would be subject
to U.S. gift tax if you had transferred your interests in the Line 1
trusts by gift immediately before your expatriation date, but
without regard to sections 2503(b) through (g), 2513, 2522, None of the amounts checked on line 1 are subject to the
2523, and 2524. List the total FMV and basis of such mark-to-market tax. Don't include them on line 2. Instead,
property on line 9. Attach a statement to Form 8854 you must attach a statement to the form that separately
describing each asset. Include the EIN (if any) for the trust in identifies each amount checked on line 1 as of the day before
which the asset is held. your expatriation date.
Some of these amounts may otherwise be taxable or
Line 10 TIP subject to income tax withholding at source. You
must provide Form W-8CE to the payor of the
List the total value of all of your beneficial interests in trusts to relevant items. See paragraphs (d), (e), and (f) of section
the extent not included on line 9. You must attach a statement 877A for more information.
to Form 8854 that lists each trust separately. Include the EIN
(if any) for each trust. Describe the assets and liabilities Line 1a. Generally, a deferred compensation item is one of
(using the categories on this balance sheet) from your the following.
interest in each trust of which you have a beneficial interest. 1. Any interest in a plan or arrangement described in
section 219(g)(5). This includes a qualified pension,
Note. To determine the value of your beneficial interest, use profit-sharing (including 401(k)), annuity, SEP, and SIMPLE
the two-step process described in section III of Notice 97-19 plan.
which is on page 40 of Internal Revenue Bulletin 1997-10 at
IRS.gov/pub/irs-irbs/irb97-10.pdf. 2. Any interest in a foreign pension plan or similar
retirement arrangement or program.
Lines 11 and 12 3. Any item of deferred compensation, whether or not
substantially vested. This is any amount of compensation if,
Intangible property includes any of the following items that under the terms of the plan, contract, or other arrangement
have substantial value independent of the services of any providing for such compensation, the following conditions
individual. were met.
• Patent, invention, formula, process, design, pattern, or a. You had a legally binding right on your expatriation
know-how. date to such compensation.
• Copyright, literary, musical, or artistic composition. b. The compensation has not been actually or
• Trademark, trade name, or brand name. constructively received on or before your expatriation date.
• Franchise, license, or contract.
c. The compensation is payable on or after your
• Method, program, system, procedure, campaign, survey,
expatriation date.
study, forecast, estimate, customer list, or technical data.
• Any similar item. Examples of items of deferred compensation include a
cash-settled stock appreciation right, a phantom stock
arrangement, a cash-settled restricted stock unit, an
Line 19
unfunded and unsecured promise to pay money or other
Attach a statement describing and listing the total value of compensation in the future (other than such a promise to
any other assets you have that aren't included on lines 1 transfer property in the future), and an interest in a trust
through 18. described in section 402(b)(1) or (4) (commonly referred to
as a “secular trust”).
Line 20 4. Any property, or right to property, that you are entitled
to receive in connection with the performance of services
Combine lines 1 through 5 and 6 through 19, not including (whether or not such property or right to property is
any amounts on line 5a. The amounts on line 5a are included substantially vested) to the extent not previously taken into
in determining the amounts on line 5. account under section 83 or in accordance with section 83.
Examples of these items include, but are not limited to,
restricted stock, stock-settled stock appreciation rights, and
Line 23 stock-settled restricted stock units.
Attach a statement describing and listing the total value of Note. A deferred compensation item does not include the
any other liabilities you have that aren't included on lines 21 portion of an item that is attributable to services performed
and 22. outside the United States while you were not a citizen or
resident of the United States. For more information, see
section 5 of Notice 2009-85, 2009-45 I.R.B. 598, available at
IRS.gov/irb/2009-45_IRB#NOT-2009-85.

Instructions for Form 8854 (2023) -5-

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Eligible deferred compensation item means any deferred owner under sections 671 through 679 on the day before
compensation item with respect to which: your expatriation date. You are considered a beneficiary of
• The payor is either a U.S. person or a non-U.S. person who such trust if:
elects to be treated as a U.S. person for purposes of section 1. You are entitled or permitted, under the terms of the
877A(d)(1), trust instrument or applicable local law, to receive a direct or
• The covered expatriate notifies the payor of their status as indirect distribution of trust income or corpus (including, for
a covered expatriate on Form W-8CE, and example, a distribution in discharge of an obligation);
• The covered expatriate irrevocably waives any right to
claim any withholding reduction on such item under any 2. You have the power to apply trust income or corpus for
treaty with the United States on Form 8854. your own benefit; or
The Secretary may provide separate guidance providing a 3. You could be paid from the trust income or corpus if
procedure for a payor who is a non-U.S. person and wishes the trust or the current interests in the trust were terminated.
to elect to be treated as a U.S. person for purposes of section Unless you elect to be treated as having received the
877A(d)(1). value of your interest in the trust, as determined for purposes
You must file Form 8854 annually to certify that no of section 877A, as of the day before your expatriation date,
you cannot claim a reduction in withholding on any
! distributions have been received from your eligible distribution from the trust under any treaty with the United
CAUTION deferred compensation item(s) or to report the
distributions you received. States. Before you can make the election, you must get a
letter ruling from the IRS as to the value, if ascertainable, of
your interest in the trust as of the day before your expatriation
Note. If you have one or more eligible deferred date by following the procedures set forth in Rev. Proc.
compensation items, you must attach a statement to the form 2020-1, 2020-1 I.R.B. 1, available at IRS.gov/irb/
that separately identifies each eligible deferred 2020-01_IRB#RP-2020-01 . You must make this election by
compensation item and includes the following language for checking the box under line 1d of this form and attaching a
each item: “I irrevocably waive any right to claim any copy of the letter ruling both to this form and to your timely
reduction in withholding for this eligible deferred filed tax return (including extensions) for the 2023 tax year.
compensation item under any treaty with the United States.” Until you obtain the valuation letter ruling and provide a copy
Line 1b. Ineligible deferred compensation item means any of such letter ruling to the trustee of the nongrantor trust
deferred compensation item that is not an eligible deferred together with certification, under penalties of perjury, that you
compensation item. The amount of this deferred have paid all tax due as a result of your election, any taxable
compensation item (the present value of the accrued benefit) distributions that you receive from the trust will be subject to
must be included on your Form 1040 or 1040-SR, or other 30% withholding.
schedule, for the portion of your tax year that includes your If you are a beneficiary of a nongrantor trust, you
expatriation date. For more information, see section 5D of ! must file Form 8854 annually to certify that no
Notice 2009-85, 2009-45 I.R.B. 598, available at IRS.gov/irb/ CAUTION distributions have been received or to report the
2009-45_IRB#NOT-2009-85. distributions you received.
Note. If you have one or more ineligible deferred
compensation items, you must attach a statement to the form Note. If you are a beneficiary of one or more nongrantor
that separately identifies each ineligible deferred trusts, you must attach a statement to the form that
compensation item and provides the present value of such separately identifies each trust and includes one of the
ineligible deferred compensation item as of the day before following statements for each trust.
your expatriation date. 1. “I waive any right to claim any reduction in withholding
Line 1c. A specified tax deferred account includes: on any distribution from such trust under any treaty with the
United States.”
1. An individual retirement plan (except those described
in section 408(k) or 408(p)), 2. “I elect under section 877A(f)(4)(B) to be treated as
having received the value of my entire interest in the trust (as
2. A Coverdell education savings account, or determined for purposes of section 877A) as of the day
3. A health savings account or an Archer medical savings before my expatriation date. I attach a copy of my valuation
account. letter ruling issued by the IRS.”
The amount of your entire interest in your specified tax
deferred account on the day before your expatriation date Line 2
must be included on your Form 1040 or 1040-SR, or other Column (a). An interest in property includes money or other
schedule, for the portion of your tax year that includes your property, regardless of whether it produces any income or
expatriation date. For more information, see section 6 of gain. In addition, an interest in the right to use property will be
Notice 2009-85, 2009-45 I.R.B. 598, available at IRS.gov/irb/ treated as an interest in such property. However, do not list
2009-45_IRB#NOT-2009-85. the following.
Note. If you have one or more specified tax deferred 1. Deferred compensation items.
accounts, you must attach a statement to the form that 2. Specified tax deferred accounts.
separately identifies each specified tax deferred account and 3. Interests in nongrantor trusts.
provides the entire account balance of each specified tax
deferred account on the day before your expatriation date. You are considered to own any interest in property that
would be included in your gross estate for federal estate tax
Line 1d. A nongrantor trust is the part of any trust, whether
purposes under chapter 11 of subtitle B of the Code if you
domestic or foreign, of which you were not considered the

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died on the day before your expatriation date as a citizen or Basis FMV Built-in Gain/Loss
resident of the United States. Whether property would be
included in your gross estate will be determined without Asset A 200,000 2,000,000 1,800,000
regard to sections 2010 through 2016. For this purpose, you Asset B 800,000 1,000,000 200,000
are considered to own your beneficial interest(s) in each trust Asset C 800,000 500,000 (300,000)
(or part of a trust), other than a nongrantor trust subject to
section 877A(f), that would not be included in your gross
estate as described in the preceding sentences. Your Step 2: Allocate the exclusion amount to each of the gain
beneficial interest(s) in such a trust shall be determined properties by multiplying the exclusion amount ($821,000) by
under the special rules set forth in section III of Notice 97-19, a ratio of the deemed gain attributable to each gain property
which is on page 40 of Internal Revenue Bulletin 1997-10 at over the total gain of all the gain properties deemed sold.
IRS.gov/pub/irs-irbs/irb97-10.pdf.
Asset A
Column (b). Use the FMV on the day before your
expatriation date. FMV is the price at which the property 1,800,000
would change hands between a buyer and a seller when both × 821,000 = 738,900
have reasonable knowledge of all the necessary facts and 2,000,000
neither has to buy or sell. If parties with adverse interests
place a value on property in an arm's-length transaction, that Asset B
is strong evidence of the FMV.
200,000
Column (c). Generally, the cost or other basis in this column 2,000,000 × 821,000 = 82,100
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
citizen or an LTR at the time you expatriated, you can make
Step 3: Figure the final amount of deemed gain on each
an irrevocable election under section 877A(h)(2) to
asset by subtracting the exclusion amount allocated to each
determine basis without regard to this restriction. Print “(h)
asset.
(2)” after any entry for which you make this election.
Column (e). Before you complete column (e), you must Asset A: 1,800,000 − 738,900 = 1,061,100
allocate the exclusion amount to the gain properties on a Asset B: 200,000 − 82,100 = 117,900
separate schedule. Attach a copy of the separate schedule to
this form. To allocate the exclusion amount, determine the
gain of each gain property listed in column (a) and enter that Column (f). Complete this column in order to list the
gain in column (d). If the total gain of all the gain properties schedule or form on which you reported the deemed sale of
exceeds the exclusion amount ($821,000 for 2023), then each property listed in column (a) (for example, Form 4797 or
allocate the entire exclusion amount to the gain properties by Form 8949).
multiplying the exclusion amount by the ratio of the gain
determined for each gain property in column (d) over the total Column (g). Complete this column only for those properties
gain of all gain properties listed in column (d). After you have for which you are electing to defer the payment of tax. First,
allocated the exclusion amount to the gain properties, complete Section D to line 4. On a separate attachment,
subtract the exclusion amount allocated to each gain allocate the amount of tax eligible for deferral among all gain
property from the gain reported for that property in column properties listed on line 2. The tax attributable to a particular
(d), and enter the resulting amount of gain in column (e). If property is determined by multiplying the amount on
the total gain of the gain properties in column (d) is less than Section D, line 4, by the ratio of the gain for that property
the exclusion amount (but greater than -0-), then you must entered in line 2, column (e), over the total amount of gain of
use the total gain amount as the exclusion amount, and you all gain properties in line 4, column (e). In line 2, column (g),
must allocate the exclusion amount, as adjusted, to the gain enter the tax attributable to each property for which you are
properties under the method described above. The exclusion electing to defer tax. Then, enter the total deferred tax for
amount allocated to each gain property cannot exceed the those properties from line 4, column (g), on Section D, line 5.
amount of that gain property's built-in gain. Example. Line 2 lists four assets, each resulting in a
See Notice 2009-85, section 3B, for more information. deemed gain in column (d). The amount of tax eligible for
Example. Xavier, a covered expatriate, renounced his deferral on Section D, line 4, is $575,000. You must go back
citizenship on Date 2. On Date 1, the day before Xavier's to line 2, column (g), to allocate the deferred tax among the
renunciation of his citizenship, he owned three assets, which individual properties.
he had owned for more than 1 year. Asset A is business You must attach a computation to show how you
property and Assets B and C are personal property. As of ! figured the tax attributable to each property.
Date 1, Asset A had an FMV of $2,000,000 and a basis of CAUTION
$200,000; Asset B had an FMV of $1,000,000 and a basis of See Section D, later, and Notice 2009-85, section 3E, for
$800,000; and Asset C had an FMV of $500,000 and a basis more information on deferring the payment of tax.
of $800,000. Xavier must allocate the exclusion amount as
follows. Note. The address listed in section 3E of Notice 2009-85 for
Step 1: Determine the built-in gain or loss of each asset by mailing your tax deferral agreement is no longer valid. See
subtracting the basis from the FMV of the asset on Date 1. Procedure for requesting a deferral of the payment of tax,
later, for the correct address.
Reporting gain or loss. You must report and recognize the
gain (or loss) of each property reported in Section C, line 2,

Instructions for Form 8854 (2023) -7-

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column (a), on the relevant form or schedule of your Form 1. A bond that is furnished to, and accepted by, the IRS,
1040 or 1040-SR for the part of the year that includes the day that is conditioned on the payment of tax (and interest
before your expatriation date. The return to which you attach thereon), and that meets the requirements of section 6325; or
your form or schedule will depend on your status at the end of 2. Another form of security (including letters of credit) that
the year. See chapter 1 of Pub. 519 to determine which form is acceptable to the IRS.
you should file. The gain from column (e) or loss from column
(d) attributable to each property is reported in the same You must contact the following office in order to make the
manner as if the property had actually been sold. For appropriate arrangements for providing security.
example, gain recognized from the deemed sale of a rental
property that has been depreciated is reported on Form 4797 Internal Revenue Service
as if it had been sold. Gain recognized from the deemed sale SBSE Advisory Office
of personal property (such as stock or a personal residence) 7850 SW 6th Court
is reported on Form 8949 as if it had been sold. Capital gain Mail Stop 5780
retains its character as capital gain; ordinary gain retains its Plantation, FL 33324-3202
character as ordinary income. Telephone: 954-991-4455

Section D—Deferral of Tax You must send your original tax deferral agreement
If you expatriated in 2023, and you chose to enter into a tax request, marked “Original,” with your Form 8854 for the year
deferral agreement with the IRS with respect to assets that includes your expatriation date to:
subject to the mark-to-market rules of section 877A, use lines
Internal Revenue Service
2 through 5 of Section D to figure the amount of tax you can
3651 S IH35
defer. Before completing lines 2 through 5 of Section D, you
MS 4301AUSC
must fill out two hypothetical individual income tax returns
Austin, TX 78741
using Form 1040 or 1040-SR. The first return includes all
income, including the section 877A(a) gain and loss. The
second return includes all income except the section 877A(a) If you are required to file a Form 1040, 1040-SR, or
gain and loss. Attach both hypothetical returns to this Form 1040-NR for the year that includes your expatriation date,
8854. also attach a copy of the tax deferral agreement request,
marked “Copy,” to the Form 8854 that you include with your
tax return.
Line 1
Note. The address listed in section 3E of Notice 2009-85 is
If you aren't electing to defer the payment of tax on the gain no longer valid.
reported in Section C, line 2, column (e), report on the If the IRS deems your collateral sufficient, and agrees to
appropriate income tax return schedule or form the gain enter into a tax deferral agreement, you can pay any tax
amount attributable to each particular property as listed in deferred, together with interest, at any time. However, the
Section C, line 2, column (e), and report the loss amount time for the payment of tax attributable to a particular deferral
attributable to each particular property as listed in Section C, asset can be extended only until (a) the year the asset is
line 2, column (d). ultimately disposed of, or (b) the year of death.
If you are electing to defer tax, go to line 2. You must file Form 8854 annually for years up to and
including the year in which the full amount of deferred
Line 2 CAUTION! tax and interest is paid.

Waiver of treaty benefits. As a further condition to
Enter on line 2 the amount of tax on line 24 of the first return, making the election to defer the payment of tax on a
which includes all income, including the section 877A(a) gain particular asset, you must waive any right under any U.S. tax
and loss. treaty that would preclude the assessment or collection of the
tax.
Line 3 Satisfying your deferred tax liability. If you entered into
an agreement for the deferral of tax with the IRS Advisory
Enter on line 3 the amount of tax on line 24 of the second Office and dispose of one or more assets for which you
return, which includes all income except the section 877A(a) elected to defer tax, you must contact that office to make
gain and loss. arrangements to satisfy your tax liability. The address for the
Advisory Office is shown above.
Line 5
Part III—Annual Expatriation
This is the amount of tax you elect to defer. If you are
Statement for Persons Who
deferring tax on all properties, enter the amount from line 4. If
you are electing deferral on only certain properties, go to Expatriated Before 2023
Section C, line 2, column (g), to show how much deferred tax You must file Part III if you:
is allocated to each property. Attach a computation.
1. Deferred the payment of tax on any property on a Form
Procedure for requesting a deferral of the payment of 8854 filed in a previous year,
tax. In order to defer any part of the mark-to-market tax, you 2. Reported an eligible deferred compensation item on a
must enter into a tax deferral agreement with the IRS and Form 8854 filed in a previous year, or
provide adequate security. Notice 2009-85 contains a sample
agreement (Appendix A). Adequate security can be either:

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3. Reported an interest in a nongrantor trust on a Form distributions of property (including money) from a nongrantor
8854 filed in a previous year. trust in 2023. Enter the part of the distribution that you would
include in gross income if you continued to be subject to tax
Line 1 as a U.S. citizen or resident. Also enter the total amount of
If you deferred the payment of tax in an earlier year, refer to tax withheld by the payor(s) of any distribution.
the Form 8854 you filed for that earlier year to complete Don't include any distribution from a trust if your
columns (a), (b), and (c). If you expatriated in 2019 or later, ! interest in the trust was treated in an earlier year as a
use the information from Part II, Section C, line 2. If you CAUTION deferred compensation item or part of a specified tax
expatriated in 2018 or earlier, use the information from Part deferred account.
III, line 1, of the earlier year's Form 8854.
If you disposed of any property in 2023 on which you Exception. Don't check the “Yes” box if you elected on a
deferred the payment of tax on a previous return, also previously filed Form 8854 to be treated as having received
complete column (d). You must report the gain or loss from the value of your entire interest in the trust as of the day
the property disposed of on the appropriate line (or schedule) before your expatriation date.
of your income tax return.
Signature
You must pay the deferred tax, plus interest, on any Form 8854 is not considered valid unless you sign it. If you
! property you disposed of, no later than the due date have someone else prepare Form 8854, you are still
CAUTION (without extensions) of your 2023 income tax return.
responsible for its correctness.
See Satisfying your deferred tax liability, earlier, for
information on arranging payment. Paid preparers. Generally, anyone you pay to prepare Form
8854 must sign it and include a preparer tax identification
See Section D under Part II, earlier, and section 3E of number (PTIN) in the space provided. The preparer must
Notice 2009-85 for more information on deferring the tax. give you a copy for your records. Someone who prepares
Form 8854 but does not charge you a fee should not sign it.
Note. The address listed in section 3E of Notice 2009-85 for
mailing your tax deferral agreement is no longer valid. See Paperwork Reduction Act Notice. We ask for the
Procedure for requesting a deferral of the payment of tax information on this form to carry out the Internal Revenue
under Section D, earlier, for the correct address. laws of the United States. You are required to give us the
information. We need it to ensure that you are complying with
Line 2 these laws and to allow us to figure and collect the right
Check the “Yes” box if you received any distributions of amount of tax.
eligible deferred compensation items in 2023. Enter the part You are not required to provide the information requested
of the distribution that you would include in gross income if on a form that is subject to the Paperwork Reduction Act
you continued to be subject to tax as a U.S. citizen or unless the form displays a valid OMB control number. Books
resident. Also enter the total amount of tax withheld by the or records relating to a form or its instructions must be
payor(s) of any eligible deferred compensation items. retained as long as their contents may become material in the
Don't enter the part of any payment that is administration of any Internal Revenue law. Generally, tax
returns and return information are confidential, as required by
CAUTION States before or after your expatriation date while you
! attributable to services performed outside the United section 6103.
weren't a citizen or resident of the United States.
The average time and expenses required to complete and
file this form will vary depending on individual circumstances.
Line 3 For the estimated averages, see the instructions for your
Unless the exception at the end of this section applies, check income tax return.
the “Yes” box if you received any direct or indirect

Instructions for Form 8854 (2023) -9-

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