Can U.S. expats fund charitable gift annuities or charitable remainder trusts?
Yes. United States citizens living overseas (U.S. expats) can donate assets to establish charitable gift annuities with U.S. charities or charitable remainder trusts. If the assets are used to fund a charitable gift annuity (CGA), the charity and donor will need to decide which state law should govern the CGA contract. The charitable reminder trust document must indicate which state law governs the trust terms. The donor should work with an attorney to draft any trust documents.
Can a U.S. expat donate foreign assets?
Yes, but there may be restrictions. Some charities will not accept gifts of foreign assets. The gift acceptance policies of a charity may not address receipt of gifts of foreign assets. It is important to consider how the value of the foreign assets will be determined in U.S. dollars before accepting the gift. Please refer to the post on PG Calc’s website for more information on accepting international gifts.
Can U.S. expats receive a charitable deduction?
Yes. U.S. expats can take tax deductions for charitable contributions if they itemize deductions on their US tax returns. The contributions must be made to qualified 501(c)(3) U.S. charities.
U.S. citizens are subject to the income tax provisions of the United States regardless of where they are living. The United States is one of three countries (Eritrea and Myanmar are also on the list) that requires its citizens to report worldwide income for taxation purposes. The foreign country may also require its residents including U.S. expats to file tax returns.
U.S. expats can take advantage of the foreign earned income exclusion and foreign tax credits. The U.S. also has tax treaties with more than 50 foreign countries that are designed to prevent double taxation of income with tax exemptions and reduced tax rates for U.S. expats. The tax treaties outline the tax rates, credits, exemptions, and deductions in the U.S. and the foreign country that apply to U.S. citizens living abroad and residents of foreign countries with U.S. income. The donor should consult their tax advisor regarding tax compliance.
