Change DV interview from Frankfurt to Sydney? + How much time to activate GC after interview?

[OnTheGo]

Oh dear ... we are in a bit of a predicament, as we really don't know where we want to be living: AUS or USA?
We just returned from a 3-week trip to Australia, where we used to live for over ten years before returning to EU two years ago. We are now considering to initially move back to Australia by say April 2014, yet we expect our DV interview at the Frankfurt embassy around August (CN EU35XXX).


Q 1: Does anyone know if we could change consular post for interview to Sydney ahead of the expected interview date (without this being scheduled prior to April/May)? What does this involve and will there be any downsides or risks?

Q 2: When we do get approved for green cards, is there a certain time frame by which we will HAVE to travel to the US to 'activate' it? I think I have read somewhere: one year...but I can't be sure. The reason I am asking is, that if we move to Australia initially, it is unlikely that we will want to move to the US soon after. But having another year to plan ahead and consider our options will be welcome.

Q 3: Further to Q 2, once we have the GC approved (say Aug 2014), will it still be possible to enter the US as tourists and NOT have the GC 'activated' until a later date - or will the first future trip to the US (post GC approval) be considered an immigration status? - The reason I ask is that from what I understand, activation of the GC status brings about immediate and ongoing obligations (yearly tax filing etc).

 

[Sm1smom]

1. The best time to request a change of venue is before the interview gets scheduled. And I believe in order to do that you will need to contact KCC with prove of residence in the new country you're requesting to change to.

2. Yes, there is a time frame. Technically, the immigrant visa issued will be valid for 6 months (in some cases it could be less than 6 months, depending on the expiration date of the medical exam). The 1 year you read about probably has to do with how long a new immigrant can stay outside of the US for immediately following the initial activation without jeopardizing the new LPR status.

3. No, you can no longer enter the US as a tourist following the initial activation. You are obligated from the day you enter to activate your LPR status.

 

[OnTheGo]

1. The best time to request a change of venue is before the interview gets scheduled. And I believe in order to do that you will need to contact KCC with prove of residence in the new country you're requesting to change to.

2. Yes, there is a time frame. Technically, the immigrant visa issued will be valid for 6 months (in some cases it could be less than 6 months, depending on the expiration date of the medical exam). The 1 year you read about probably has to do with how long a new immigrant can stay outside of the US for immediately following the initial activation without jeopardizing the new LPR status.

3. No, you can no longer enter the US as a tourist following the initial activation. You are obligated from the day you enter to activate your LPR status.

Thanks for your reply, much appreciated. That clears things up a bit. The main thing I don't like about this is the obligation to declare world wide income even when not living in the US (yet) and for that obligation to continue in the future, even where one decides to live in another country again. ('citizenship' based, not residence based tax system)

 

[Britsimon]

Thanks for your reply, much appreciated. That clears things up a bit. The main thing I don't like about this is the obligation to declare world wide income even when not living in the US (yet) and for that obligation to continue in the future, even where one decides to live in another country again. ('citizenship' based, not residence based tax system)

The world wide income thing (plus FBAR reporting - don't forget) is a pain in the arse, there is no doubt. However, since tax rates are substantially lower in the USA than many other countries (for instance I am paying 50% in the UK), at least the foreign tax paid will wipe out the tax burden in the USA....

 

[OnTheGo]

The world wide income thing (plus FBAR reporting - don't forget) is a pain in the arse, there is no doubt. However, since tax rates are substantially lower in the USA than many other countries (for instance I am paying 50% in the UK), at least the foreign tax paid will wipe out the tax burden in the USA....

Oh, yes I agree with you on the new stringent FBAR law! This law is essentially telling all Americans to report each and every foreign account (above $10k of avg. value) that they have an interest in, or signature authority over, no matter if that account holds monetary assets or has non-monetary assets (i.e. life insurance).

While this would be the same in most other nations (as they all tax your world wide income), where it stinks is that this obligation to report continues even if the citzen (or LPR) no longer resides in the USA.

The craziness of this tax system becomes apparent when you look at the reality of how it impacts on ordinary people. In my research on FBAR etc I came across this organization, they also have a Facebook page. http://americansabroad.org/issues/fbar/

How ridiculous and unfair the extend of US tax authorities' methods and claims are, becomes especially apparent when you look at numerous cases of people who have never lived in the USA but simply became US citizens by being born to US parents residing overseas. Since most banks overseas have been TERMINATING bank accounts held by "US citizens" living there, earning their income there, paying tax on their income earned there, in order not to comply with the FBAR laws that requires THEM to report on any accounts held by US citizens also ... many tens of thousands of "US citizens" have been HANDING IN THEIR US PASSPORTS to the US embassies!

But the US Government would not stop there! There may be an "exit tax" to be paid by those wanting to renounce their citizenship (not sure about those giving up on their LPR status)!
They essentially add up ALL your world wide assets and calculate what WOULD have to be due in income tax IF you were to sell them today! etc etc.

BTW...yes, you are right...the higher tax rate in the foreign jurisdiction COULD wipe out any US tax payable, but don't forget that any income earned overseas (i.e. the UK) will be calculated back into USD. So for some people, especially for incomes in the lower to medium reaches, an income in their home country might have them in a lower tax band, but when that same income gets exchanged into USD by the IRS, then in the US it might push you into their higher tax band. (I am just applying theory here, but I guess that's how it will work.)

Many people are also lamenting the sheer COST of compliance...essentially you may need a tax attorney to file your annual income tax and FBAR reports! That apparently costs THOUSANDS every year, as many people are reporting. I can't believe that a simple tax form can be 60 pages + (never seen it myself, but that in itself demonstrates the comprehensiveness and complexity).

 

[SusieQQQ]

While the country I live in, like most, taxes on a residence basis, we also have to pay an exit tax if we emigrate and want to take our assets with. Even if we leave our assets behind in the country, emigration is a trigger event for capital gains tax ie it is calculated as though we sold the assets and still have to pay the tax - even if we maintain citizenship. So the US is not really unique in exit taxes.

Fwiw I also know people in the US who manage to file tax returns and FBAR themselves, no consultants involved.

 

[Britsimon]

Oh, yes I agree with you on the new stringent FBAR law! This law is essentially telling all Americans to report each and every foreign account (above $10k of avg. value) that they have an interest in, or signature authority over, no matter if that account holds monetary assets or has non-monetary assets (i.e. life insurance).

While this would be the same in most other nations (as they all tax your world wide income), where it stinks is that this obligation to report continues even if the citzen (or LPR) no longer resides in the USA.

The craziness of this tax system becomes apparent when you look at the reality of how it impacts on ordinary people. In my research on FBAR etc I came across this organization, they also have a Facebook page. http://americansabroad.org/issues/fbar/

How ridiculous and unfair the extend of US tax authorities' methods and claims are, becomes especially apparent when you look at numerous cases of people who have never lived in the USA but simply became US citizens by being born to US parents residing overseas. Since most banks overseas have been TERMINATING bank accounts held by "US citizens" living there, earning their income there, paying tax on their income earned there, in order not to comply with the FBAR laws that requires THEM to report on any accounts held by US citizens also ... many tens of thousands of "US citizens" have been HANDING IN THEIR US PASSPORTS to the US embassies!

But the US Government would not stop there! There may be an "exit tax" to be paid by those wanting to renounce their citizenship (not sure about those giving up on their LPR status)!
They essentially add up ALL your world wide assets and calculate what WOULD have to be due in income tax IF you were to sell them today! etc etc.

BTW...yes, you are right...the higher tax rate in the foreign jurisdiction COULD wipe out any US tax payable, but don't forget that any income earned overseas (i.e. the UK) will be calculated back into USD. So for some people, especially for incomes in the lower to medium reaches, an income in their home country might have them in a lower tax band, but when that same income gets exchanged into USD by the IRS, then in the US it might push you into their higher tax band. (I am just applying theory here, but I guess that's how it will work.)

Many people are also lamenting the sheer COST of compliance...essentially you may need a tax attorney to file your annual income tax and FBAR reports! That apparently costs THOUSANDS every year, as many people are reporting. I can't believe that a simple tax form can be 60 pages + (never seen it myself, but that in itself demonstrates the comprehensiveness and complexity).

That is more than just theory, the conversion of perceived (impted) profits on currency conversion is far reaching. They even want to calculate tax due on monthly capital reduction of a mortgage held on a UK property. If I paid off £1000, they would want me to calculate the imputed gain/loss based on the GBP/USD conversion rate on the day I mortgaged the property (the day I bought it) to the GBP/USD conversion rate on the day I pay of that small amount of capital. That is INSANELY complicated!

 

[OnTheGo]

That is more than just theory, the conversion of perceived (impted) profits on currency conversion is far reaching. They even want to calculate tax due on monthly capital reduction of a mortgage held on a UK property. If I paid off £1000, they would want me to calculate the imputed gain/loss based on the GBP/USD conversion rate on the day I mortgaged the property (the day I bought it) to the GBP/USD conversion rate on the day I pay of that small amount of capital. That is INSANELY complicated!

Why would any tax be due on a capital reduction of a property? That capital reduction is done by using already taxed funds (your income or salary after being taxed) and it's applied against the mortgage (debt) on a house that is an asset and has not triggered a capital gains event until sold.

Or does this have to do with the fact that in the US (and perhaps also the UK?) you can actually deduct mortgage interest for your own private residence from your tax liability? You see, in Germany and in Australia, no such thing exists...you can only deduct interest as it relates to an investment property (i.e. one you rent out to earn an income on; in fact in GER you can only deduct those interest expenses from the rental income, not from any other income source, i.e. not from your normal salary).

 

[OnTheGo]

While the country I live in, like most, taxes on a residence basis, we also have to pay an exit tax if we emigrate and want to take our assets with. Even if we leave our assets behind in the country, emigration is a trigger event for capital gains tax ie it is calculated as though we sold the assets and still have to pay the tax - even if we maintain citizenship. So the US is not really unique in exit taxes.

Fwiw I also know people in the US who manage to file tax returns and FBAR themselves, no consultants involved.

Hi Susie - what is your home country, if I may ask?

Yes, "taking your assets with us" when imigrating, means selling them. That is normal for it to be taxed when emigrating from any country. But your second part, "leaving assets behind...emigration is a trigger event for CGT...calculated as though the assets were sold" - I'd be curious to know what country apart from the USA and Eritrea (Africa) have such tax law?

 

[OnTheGo]

BTW ...

re: the 6 month rule ("immigrant visa issued will be valid for 6 months (in some cases it could be less than 6 months, depending on the expiration date of the medical exam)"

Obviously, the medicals would have to be done prior to the interview.
So that means, the LPR status given on the day of the interview will only be valid for 'activation' at a border crossing for 6 months minus the time between the medicals and the interview?

How much prior are we talking, one month, two months?

That is insanely short time frame for people to organize themselves for immigration to another country. (4 or 5 months).
Of course, many things can be organized in the lead up to the (expected) interview date, but I wonder why they make such strict deadlines. I think in many cases you will simply have to enter just for the purpose of 'activation' ... so you combine that trip with organizing something in the lead up to permanent immigration.

 

[SusieQQQ]

Hi Susie - what is your home country, if I may ask?

Yes, "taking your assets with us" when imigrating, means selling them. That is normal for it to be taxed when emigrating from any country. But your second part, "leaving assets behind...emigration is a trigger event for CGT...calculated as though the assets were sold" - I'd be curious to know what country apart from the USA and Eritrea (Africa) have such tax law?

South Africa.
By taxed on leaving I meant not only did you pay cgt but then you had a further 10% tax on value of funds taken out, though I think this has been dropped now. The govt also reserves the right to make you stagger what you take out. The joys of capital controls. In fact it's only very recently that you can take all your funds out with you, until a couple of years ago there was a maximum and the rest had to be left in SA.

 

[OnTheGo]

Thanks ... that sounds awful indeed, glad they lifted those sanctions. I guess they figured too many South Africans left the country. I know there are many living in Australia today.

 

[Sm1smom]

BTW ...



Obviously, the medicals would have to be done prior to the interview.
So that means, the LPR status given on the day of the interview will only be valid for 'activation' at a border crossing for 6 months minus the time between the medicals and the interview?

How much prior are we talking, one month, two months?

That is insanely short time frame for people to organize themselves for immigration to another country. (4 or 5 months).
Of course, many things can be organized in the lead up to the (expected) interview date, but I wonder why they make such strict deadlines. I think in many cases you will simply have to enter just for the purpose of 'activation' ... so you combine that trip with organizing something in the lead up to permanent immigration.

Quick correction, an LPR status is not given at the time of the interview. What you get is an immigrant visa that enables you to come into the US. Being granited the immigrant visa does not mean the visa holder has a LPR status.

The time difference between when the medical is done and interview date varies from country to country. In most though, it's mostly insignificant. It's usually when an applicant is put on AP for one reason or the other that the validity of the immigrant visa has any bearing on the expiration date of the medical exam.

Giving people a 6 month window to migrate is not insanely short IMO. It's not like people simply wake up one day and decide to approach the embassy/consulate and apply for a migrant visa. The process is usually prolonged and takes years.

In addition, they've made allowances for new immigrants to go back and tie up whatever loose ends they may have, after activating their GC, - the stamp on the passport issued at the POE is valid for 1 year, it can be used in place of the palstic GC, which means there is no risk of being considered to have abandoned the LPR status if one stays out for upto 1 year and there's the re-entry permit that can be applied for should one need to stay away for upto 2 years.

What I think is insane is for people to expect to be given an open ended immigrant visa while they consider if they what to take up the opportunity or not.

 

[OnTheGo]

What I think is insane is for people to expect to be given an open ended immigrant visa while they consider if they what to take up the opportunity or not.

No one said that! If you interpreted my post in that way, you are wrong.
I was not saying that I am seeking an "open ended" immigration visa. I just wanted to clarify at what point in time we were obliged to file US tax returns, etc. which is a legitimate and very important issue.

It is not unusual to have reservations at this point in the process, especially after learning of the rather unusual US tax laws and extreme scrutiny by the IRS on anyone leaving the US later to take on overseas opportunities (to the point that banks overseas terminate all bank accounts held by US citizens in order to avoid the hassle with dealing with the IRS), which is in complete contrast to all other countries in the world which have a resident based tax system.

I still look very positively at a new life in the USA, take away the expat tax thing and health care debacle.

 

[Sm1smom]

No one said that! If you interpreted my post in that way, you are wrong.
I was not saying that I am seeking an "open ended" immigration visa. I just wanted to clarify at what point in time we were obliged to file US tax returns, etc. which is a legitimate and very important issue.

It is not unusual to have reservations at this point in the process, especially after learning of the rather unusual US tax laws and extreme scrutiny by the IRS on anyone leaving the US later to take on overseas opportunities (to the point that banks overseas terminate all bank accounts held by US citizens in order to avoid the hassle with dealing with the IRS), which is in complete contrast to all other countries in the world which have a resident based tax system.

I still look very positively at a new life in the USA, take away the expat tax thing and health care debacle.

Noted!

 

[SusieQQQ]

To play devil's advocate on the worldwide tax thing: they make it clear (by only giving you 6 months to activate, and sometimes explicitly as was the case in our interview) that once they issue you an immigrant visa, they want you to go live there. If one does that of course, then there's no issue with earning income somewhere else (and there is a special procedure for the year in which you immigrate re the tax). Alternatively you could look at it in financial terms: that the cost of compliance with the tax regime while living elsewhere is the cost of the option of keeping your LPR status.

Because there are always at least two sides to every story