Coming to America: Part IIComing to America: Part II

Under the current tax system, the United States imposes three types of transfer taxes: estate, gift and generation-skipping. U.S. citizens and resident aliens (RAs) are subject to estate tax on worldwide assets and are similarly taxed on worldwide gratuitous transfers for gift tax. U.S. citizens are subject to transfer taxes even if they never lived in the United States. If an individual isn’t a U.S. citizen or RA, then not all assets will be subject to those taxes. However, it remains uncertain whether the Trump administration will radically change or eliminate the transfer tax system.

The definition of “domicile” is clear under the income tax Treasury regulations. Under the income tax rules, a non-U.S. citizen is treated as an RA if one...