---
kind: "section"
citation: "26 U.S.C. § 877A"
title: "26"
title_heading: "Internal Revenue Code"
number: "877A"
heading: "Tax responsibilities of expatriation"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/26/877A"
units:
  - "Subtitle A — Income Taxes"
  - "Chapter 1 — Normal Taxes and Surtaxes"
  - "Subchapter N — Tax Based on Income From Sources Within or Without the United States"
  - "Part II — Nonresident Aliens and Foreign Corporations"
  - "Subpart A — Nonresident Alien Individuals"
---

# §877A. Tax responsibilities of expatriation

- (a) **General rules—** For purposes of this subtitle—
  - (1) **Mark to market—** All [property](/usc/26/317.md?p=a) of a covered expatriate shall be treated as sold on the day before the expatriation date for its fair market [value](/usc/26/851.md?p=c-4).
  - (2) **Recognition of gain or loss—** In the case of any sale under [paragraph (1)](#a-1)—
    - (A) notwithstanding any other provision of this title, any gain arising from such sale shall be taken into account for the taxable year of the sale, and
    - (B) any loss arising from such sale shall be taken into account for the taxable year of the sale to the extent otherwise provided by this title, except that [section 1091](/usc/26/1091.md) shall not apply to any such loss.

    Proper adjustment shall be made in the amount of any gain or loss subsequently realized for gain or loss taken into account under the preceding sentence, determined without regard to [paragraph (3)](#a-3).

  - (3) **Exclusion for certain gain—**
    - (A) **In general—** The amount which would (but for this paragraph) be includible in the gross income of any individual by reason of [paragraph (1)](#a-1) shall be reduced (but not below zero) by $600,000.
    - (B) **Adjustment for inflation—**
      - (i) **In general—** In the case of any taxable year beginning in a calendar year after 2008, the dollar amount in [subparagraph (A)](#a-3-A) shall be increased by an amount equal to—
        - (I) such dollar amount, multiplied by
        - (II) the cost-of-living adjustment determined under [section 1(f)(3)](/usc/26/1.md?p=f-3) for the calendar year in which the taxable year begins, by substituting “calendar year 2007” for “calendar year 2016” in subparagraph (A)(ii) thereof.
      - (ii) **Rounding—** If any amount as adjusted under [clause (i)](#a-3-B-i) is not a multiple of $1,000, such amount shall be rounded to the nearest multiple of $1,000.
- (b) **Election to defer tax—**
  - (1) **In general—** If the [taxpayer](/usc/26/1313.md?p=b) elects the application of this subsection with respect to any [property](/usc/26/317.md?p=a) treated as sold by reason of [subsection (a)](#a), the time for payment of the additional tax attributable to such [property](/usc/26/317.md?p=a) shall be extended until the [due date](/usc/26/430.md?p=k-6-B) of the return for the taxable year in which such [property](/usc/26/317.md?p=a) is disposed of (or, in the case of [property](/usc/26/317.md?p=a) disposed of in a transaction in which gain is not recognized in whole or in part, until such other date as the Secretary may prescribe).
  - (2) **Determination of tax with respect to property—** For purposes of [paragraph (1)](#b-1), the additional tax attributable to any [property](/usc/26/317.md?p=a) is an amount which bears the same ratio to the additional tax imposed by this chapter for the taxable year solely by reason of [subsection (a)](#a) as the gain taken into account under [subsection (a)](#a) with respect to such [property](/usc/26/317.md?p=a) bears to the total gain taken into account under [subsection (a)](#a) with respect to all [property](/usc/26/317.md?p=a) to which [subsection (a)](#a) applies.
  - (3) **Termination of extension—** The [due date](/usc/26/430.md?p=k-6-B) for payment of tax may not be extended under this subsection later than the [due date](/usc/26/430.md?p=k-6-B) for the return of tax imposed by this chapter for the taxable year which includes the date of death of the expatriate (or, if earlier, the time that the security provided with respect to the [property](/usc/26/317.md?p=a) fails to meet the requirements of [paragraph (4)](#b-4), unless the [taxpayer](/usc/26/1313.md?p=b) corrects such failure within the time specified by the Secretary).
  - (4) **Security—**
    - (A) **In general—** No election may be made under [paragraph (1)](#b-1) with respect to any [property](/usc/26/317.md?p=a) unless adequate security is provided with respect to such [property](/usc/26/317.md?p=a).
    - (B) **Adequate security—** For purposes of [subparagraph (A)](#b-4-A), security with respect to any [property](/usc/26/317.md?p=a) shall be treated as adequate security if—
      - (i) it is a [bond](/usc/26/150.md?p=a-1) which is furnished to, and accepted by, the Secretary, which is conditioned on the payment of tax (and [interest](/usc/26/856.md?p=f-1) thereon), and which meets the requirements of [section 6325](/usc/26/6325.md), or
      - (ii) it is another form of security for such payment (including letters of credit) that meets such requirements as the Secretary may prescribe.
  - (5) **Waiver of certain rights—** No election may be made under [paragraph (1)](#b-1) unless the [taxpayer](/usc/26/1313.md?p=b) makes an irrevocable waiver of any right under any treaty of the [United States](/usc/26/993.md?p=g) which would preclude assessment or collection of any tax imposed by reason of this section.
  - (6) **Elections—** An election under [paragraph (1)](#b-1) shall only apply to [property](/usc/26/317.md?p=a) described in the election and, once made, is irrevocable.
  - (7) **Interest—** For purposes of [section 6601](/usc/26/6601.md), the last date for the payment of tax shall be determined without regard to the election under this subsection.
- (c) **Exception for certain property—** [Subsection (a)](#a) shall not apply to—
  - (1) any deferred [compensation](/usc/26/414.md?p=n-5-C-iii) item (as defined in [subsection (d)(4)](#d-4)),
  - (2) any specified tax deferred account (as defined in [subsection (e)(2)](#e-2)), and
  - (3) any [interest](/usc/26/856.md?p=f-1) in a nongrantor trust (as defined in [subsection (f)(3)](#f-3)).
- (d) **Treatment of deferred compensation items—**
  - (1) **Withholding on eligible deferred compensation items—**
    - (A) **In general—** In the case of any eligible deferred [compensation](/usc/26/414.md?p=n-5-C-iii) item, the payor shall deduct and withhold from any taxable payment to a covered expatriate with respect to such item a tax equal to 30 percent thereof.
    - (B) **Taxable payment—** For purposes of [subparagraph (A)](#d-1-A), the term “taxable payment” means with respect to a covered expatriate any payment to the extent it would be includible in the gross income of the covered expatriate if such expatriate continued to be subject to tax as a citizen or resident of the [United States](/usc/26/993.md?p=g). A deferred [compensation](/usc/26/414.md?p=n-5-C-iii) item shall be taken into account as a payment under the preceding sentence when such item would be so includible.
  - (2) **Other deferred compensation items—** In the case of any deferred [compensation](/usc/26/414.md?p=n-5-C-iii) item which is not an eligible deferred [compensation](/usc/26/414.md?p=n-5-C-iii) item—
    - (A)
      - (i) with respect to any deferred [compensation](/usc/26/414.md?p=n-5-C-iii) item to which [clause (ii)](#d-2-A-ii) does not apply, an amount equal to the present [value](/usc/26/851.md?p=c-4) of the covered expatriate’s [accrued benefit](/usc/26/414.md?p=z-4-C) shall be treated as having been received by such individual on the day before the expatriation date as a distribution under the plan, and
      - (ii) with respect to any deferred [compensation](/usc/26/414.md?p=n-5-C-iii) item referred to in [paragraph (4)(D)](#d-4-D), the rights of the covered expatriate to such item shall be treated as becoming transferable and not subject to a substantial risk of forfeiture on the day before the expatriation date,
    - (B) no early distribution tax shall apply by reason of such treatment, and
    - (C) appropriate adjustments shall be made to subsequent distributions from the plan to reflect such treatment.
  - (3) **Eligible deferred compensation items—** For purposes of this subsection, the term “eligible deferred [compensation](/usc/26/414.md?p=n-5-C-iii) item” means any deferred [compensation](/usc/26/414.md?p=n-5-C-iii) item with respect to which—
    - (A) the payor of such item is—
      - (i) a [United States](/usc/26/993.md?p=g) person, or
      - (ii) a person who is not a [United States](/usc/26/993.md?p=g) person but who elects to be treated as a [United States](/usc/26/993.md?p=g) person for purposes of [paragraph (1)](#d-1) and meets such requirements as the Secretary may provide to ensure that the payor will meet the requirements of [paragraph (1)](#d-1), and
    - (B) the covered expatriate—
      - (i) notifies the payor of his status as a covered expatriate, and
      - (ii) makes an irrevocable waiver of any right to claim any reduction under any treaty with the [United States](/usc/26/993.md?p=g) in withholding on such item.
  - (4) **Deferred compensation item—** For purposes of this subsection, the term “deferred [compensation](/usc/26/414.md?p=n-5-C-iii) item” means—
    - (A) any [interest](/usc/26/856.md?p=f-1) in a plan or arrangement described in [section 219(g)(5)](/usc/26/219.md?p=g-5),
    - (B) any [interest](/usc/26/856.md?p=f-1) in a foreign pension plan or similar retirement arrangement or program,
    - (C) any item of deferred [compensation](/usc/26/414.md?p=n-5-C-iii), and
    - (D) any [property](/usc/26/317.md?p=a), or right to [property](/usc/26/317.md?p=a), which the individual is entitled to receive in connection with the performance of services to the extent not previously taken into account under [section 83](/usc/26/83.md) or in accordance with section 83.
  - (5) **Exception—** Paragraphs [(1)](#d-1) and [(2)](#d-2) shall not apply to any deferred [compensation](/usc/26/414.md?p=n-5-C-iii) item to the extent attributable to services performed outside the [United States](/usc/26/993.md?p=g) while the covered expatriate was not a citizen or resident of the [United States](/usc/26/993.md?p=g).
  - (6) **Special rules—**
    - (A) **Application of withholding rules—** Rules similar to the rules of subchapter B of [chapter 3](/usc/26/chstA/ch3.md) shall apply for purposes of this subsection.
    - (B) **Application of tax—** Any item subject to the withholding tax imposed under [paragraph (1)](#d-1) shall be subject to tax under section 871.
    - (C) **Coordination with other withholding requirements—** Any item subject to withholding under [paragraph (1)](#d-1) shall not be subject to withholding under [section 1441](/usc/26/1441.md) or chapter 24.
- (e) **Treatment of specified tax deferred accounts—**
  - (1) **Account treated as distributed—** In the case of any [interest](/usc/26/856.md?p=f-1) in a specified tax deferred account held by a covered expatriate on the day before the expatriation date—
    - (A) the covered expatriate shall be treated as receiving a distribution of his entire [interest](/usc/26/856.md?p=f-1) in such account on the day before the expatriation date,
    - (B) no early distribution tax shall apply by reason of such treatment, and
    - (C) appropriate adjustments shall be made to subsequent distributions from the account to reflect such treatment.
  - (2) **Specified tax deferred account—** For purposes of [paragraph (1)](#e-1), the term “specified tax deferred account” means an individual retirement plan (as defined in [section 7701(a)(37)](/usc/26/7701.md?p=a-37)) other than any arrangement described in subsection [(k)](/usc/26/408.md?p=k) or [(p)](/usc/26/408.md?p=p) of section 408, a qualified tuition program (as defined in [section 529](/usc/26/529.md)), a qualified ABLE program (as defined in [section 529A](/usc/26/529A.md)), a Coverdell education savings account (as defined in [section 530](/usc/26/530.md)), a health savings account (as defined in [section 223](/usc/26/223.md)), and an Archer MSA (as defined in [section 220](/usc/26/220.md)).
- (f) **Special rules for nongrantor trusts—**
  - (1) **In general—** In the case of a distribution (directly or [indirectly](/usc/26/101.md?p=a-3-B)) of any [property](/usc/26/317.md?p=a) from a nongrantor trust to a covered expatriate—
    - (A) the trustee shall deduct and withhold from such distribution an amount equal to 30 percent of the taxable portion of the distribution, and
    - (B) if the fair market [value](/usc/26/851.md?p=c-4) of such [property](/usc/26/317.md?p=a) exceeds its adjusted basis in the hands of the trust, gain shall be recognized to the trust as if such [property](/usc/26/317.md?p=a) were sold to the expatriate at its fair market [value](/usc/26/851.md?p=c-4).
  - (2) **Taxable portion—** For purposes of this subsection, the term “taxable portion” means, with respect to any distribution, that portion of the distribution which would be includible in the gross income of the covered expatriate if such expatriate continued to be subject to tax as a citizen or resident of the [United States](/usc/26/993.md?p=g).
  - (3) **Nongrantor trust—** For purposes of this subsection, the term “nongrantor trust” means the portion of any trust that the individual is not considered the owner of under subpart E of part I of subchapter J. The [determination](/usc/26/1313.md?p=a) under the preceding sentence shall be made immediately before the expatriation date.
  - (4) **Special rules relating to withholding—** For purposes of this subsection—
    - (A) rules similar to the rules of [subsection (d)(6)](#d-6) shall apply, and
    - (B) the covered expatriate shall be treated as having waived any right to claim any reduction under any treaty with the [United States](/usc/26/993.md?p=g) in withholding on any distribution to which [paragraph (1)(A)](#f-1-A) applies unless the covered expatriate agrees to such other treatment as the Secretary determines appropriate.
  - (5) **Application—** This subsection shall apply to a nongrantor trust only if the covered expatriate was a beneficiary of the trust on the day before the expatriation date.
- (g) **Definitions and special rules relating to expatriation—** For purposes of this section—
  - (1) **Covered expatriate—**
    - (A) **In general—** The term “covered expatriate” means an expatriate who meets the requirements of subparagraph [(A)](/usc/26/877.md?p=a-2-A), [(B)](/usc/26/877.md?p=a-2-B), or [(C)](/usc/26/877.md?p=a-2-C) of section 877(a)(2).
    - (B) **Exceptions—** An individual shall not be treated as meeting the requirements of subparagraph [(A)](/usc/26/877.md?p=a-2-A) or [(B)](/usc/26/877.md?p=a-2-B) of section 877(a)(2) if—
      - (i) the individual—
        - (I) became at birth a citizen of the [United States](/usc/26/993.md?p=g) and a citizen of another country and, as of the expatriation date, continues to be a citizen of, and is taxed as a resident of, such other country, and
        - (II) has been a resident of the [United States](/usc/26/993.md?p=g) (as defined in [section 7701(b)(1)(A)(ii)](/usc/26/7701.md?p=b-1-A-ii)) for not more than 10 taxable years during the 15-taxable year period ending with the taxable year during which the expatriation date occurs, or
      - (ii)
        - (I) the individual’s relinquishment of [United States](/usc/26/993.md?p=g) citizenship occurs before such individual attains age 18½, and
        - (II) the individual has been a resident of the [United States](/usc/26/993.md?p=g) (as so defined) for not more than 10 taxable years before the date of relinquishment.
    - (C) **Covered expatriates also subject to tax as citizens or residents—** In the case of any covered expatriate who is subject to tax as a citizen or resident of the [United States](/usc/26/993.md?p=g) for any period beginning after the expatriation date, such individual shall not be treated as a covered expatriate during such period for purposes of subsections [(d)(1)](#d-1) and [(f)](#f) and section 2801.
  - (2) **Expatriate—** The term “expatriate” means—
    - (A) any [United States](/usc/26/993.md?p=g) citizen who relinquishes his citizenship, and
    - (B) any long-term resident of the [United States](/usc/26/993.md?p=g) who ceases to be a lawful permanent resident of the [United States](/usc/26/993.md?p=g) (within the meaning of [section 7701(b)(6)](/usc/26/7701.md?p=b-6)).
  - (3) **Expatriation date—** The term “expatriation date” means—
    - (A) the date an individual relinquishes [United States](/usc/26/993.md?p=g) citizenship, or
    - (B) in the case of a long-term resident of the [United States](/usc/26/993.md?p=g), the date on which the individual ceases to be a lawful permanent resident of the [United States](/usc/26/993.md?p=g) (within the meaning of [section 7701(b)(6)](/usc/26/7701.md?p=b-6)).
  - (4) **Relinquishment of citizenship—** A citizen shall be treated as relinquishing his [United States](/usc/26/993.md?p=g) citizenship on the earliest of—
    - (A) the date the individual renounces his [United States](/usc/26/993.md?p=g) nationality before a diplomatic or consular officer of the [United States](/usc/26/993.md?p=g) pursuant to paragraph (5) of section 349(a) of the Immigration and Nationality Act ([8 U.S.C. 1481(a)(5)](/usc/8/1481.md?p=a-5)),
    - (B) the date the individual furnishes to the [United States](/usc/26/993.md?p=g) Department of State a signed statement of voluntary relinquishment of [United States](/usc/26/993.md?p=g) nationality confirming the performance of an act of expatriation specified in paragraph (1), (2), (3), or (4) of section 349(a) of the Immigration and Nationality Act ([8 U.S.C. 1481(a)(1)](/usc/8/1481.md?p=a-1)–(4)),
    - (C) the date the [United States](/usc/26/993.md?p=g) Department of State issues to the individual a certificate of loss of nationality, or
    - (D) the date a court of the [United States](/usc/26/993.md?p=g) cancels a naturalized citizen’s certificate of naturalization.

    Subparagraph [(A)](#g-4-A) or [(B)](#g-4-B) shall not apply to any individual unless the renunciation or voluntary relinquishment is subsequently approved by the issuance to the individual of a certificate of loss of nationality by the [United States](/usc/26/993.md?p=g) Department of State.

  - (5) **Long-term resident—** The term “long-term resident” has the meaning given to such term by [section 877(e)(2)](/usc/26/877.md?p=e-2).
  - (6) **Early distribution tax—** The term “early distribution tax” means any increase in tax imposed under section [72(t)](/usc/26/72.md?p=t), [220(f)(4)](/usc/26/220.md?p=f-4), [223(f)(4)](/usc/26/223.md?p=f-4), [409A(a)(1)(B)](/usc/26/409A.md?p=a-1-B), [529(c)(6)](/usc/26/529.md?p=c-6), [529A(c)(3)](/usc/26/529A.md?p=c-3), or [530(d)(4)](/usc/26/530.md?p=d-4).
- (h) **Other rules—**
  - (1) **Termination of deferrals, etc.** In the case of any covered expatriate, notwithstanding any other provision of this title—
    - (A) any time period for acquiring [property](/usc/26/317.md?p=a) which would result in the reduction in the amount of gain recognized with respect to [property](/usc/26/317.md?p=a) disposed of by the [taxpayer](/usc/26/1313.md?p=b) shall terminate on the day before the expatriation date, and
    - (B) any extension of time for payment of tax shall cease to apply on the day before the expatriation date and the unpaid portion of such tax shall be due and payable at the time and in the manner prescribed by the Secretary.
  - (2) **Step-up in basis—** Solely for purposes of determining any tax imposed by reason of [subsection (a)](#a), [property](/usc/26/317.md?p=a) which was held by an individual on the date the individual first became a resident of the [United States](/usc/26/993.md?p=g) (within the meaning of [section 7701(b)](/usc/26/7701.md?p=b)) shall be treated as having a basis on such date of not less than the fair market [value](/usc/26/851.md?p=c-4) of such [property](/usc/26/317.md?p=a) on such date. The preceding sentence shall not apply if the individual elects not to have such sentence apply. Such an election, once made, shall be irrevocable.
  - (3) **Coordination with section 684—** If the expatriation of any individual would result in the recognition of gain under [section 684](/usc/26/684.md), this section shall be applied after the application of section 684.
- (i) **Regulations—** The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.

## Source credit

(Added Pub. L. 110–245, title III, § 301(a), June 17, 2008, 122 Stat. 1638; amended Pub. L. 113–295, div. B, title I, § 102(e)(2), Dec. 19, 2014, 128 Stat. 4062; Pub. L. 115–97, title I, § 11002(d)(1)(BB), Dec. 22, 2017, 131 Stat. 2060; Pub. L. 115–141, div. U, title IV, § 401(a)(154), Mar. 23, 2018, 132 Stat. 1191.)

## Notes

### Inflation Adjusted Items for Certain Years

For inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under section 1 of this title.

### Editorial Notes

### Amendments

2018—Subsec. (g)(6). Pub. L. 115–141 substituted “220(f)(4)” for “220(e)(4)”.

2017—Subsec. (a)(3)(B)(i)(II). Pub. L. 115–97 substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B) thereof”.

2014—Subsec. (e)(2). Pub. L. 113–295, § 102(e)(2)(A), inserted “a qualified ABLE program (as defined in section 529A),” after “529),”.

Subsec. (g)(6). Pub. L. 113–295, § 102(e)(2)(B), inserted “529A(c)(3),” after “529(c)(6),”.

### Statutory Notes and Related Subsidiaries

### Effective Date of 2017 Amendment

Amendment by Pub. L. 115–97 applicable to taxable years beginning after Dec. 31, 2017, see section 11002(e) of Pub. L. 115–97, set out as a note under section 1 of this title.

### Effective Date of 2014 Amendment

Amendment by Pub. L. 113–295 applicable to taxable years beginning after Dec. 31, 2014, see section 102(f)(1) of Pub. L. 113–295, set out as a note under section 552a of Title 5, Government Organization and Employees.

### Effective Date

Section applicable to any individual whose expatriation date is on or after June 17, 2008, see section 301(g)(1) of Pub. L. 110–245, set out as a note under section 2801 of this title.