Tax Fairness for Americans Abroad Act of 2018
This bill allows certain U.S. citizens who are residents of foreign countries to elect to use an alternative tax exclusion for foreign source earned and unearned income.
[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7358 Introduced in House (IH)]
<DOC>
115th CONGRESS
2d Session
H. R. 7358
To amend the Internal Revenue Code of 1986 to provide an alternative
exclusion for nonresident citizens of the United States living abroad.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 20, 2018
Mr. Holding introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide an alternative
exclusion for nonresident citizens of the United States living abroad.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Tax Fairness for Americans Abroad
Act of 2018''.
SEC. 2. TAXATION OF NONRESIDENT CITIZENS.
(a) In General.--The Internal Revenue Code of 1986 is amended by
inserting after section 911 the following new section:
``SEC. 911A. ALTERNATIVE FOR NONRESIDENT CITIZENS OF THE UNITED STATES
LIVING ABROAD.
``(a) Exclusion of Foreign Income From Gross Income.--In the case
of a qualified nonresident citizen, there shall be excluded from the
gross income of such individual, and exempt from taxation under this
subtitle, for any taxable year--
``(1) the foreign earned income of such individual, and
``(2) the foreign unearned income of such individual.
``(b) Definitions.--For purposes of this section--
``(1) In general.--Unless otherwise provided, terms used in
this section have the same meaning given such terms in section
911.
``(2) Qualified nonresident citizen.--The term `qualified
nonresident citizen' means, with respect to a taxable year, a
nonresident citizen who--
``(A) has not made the election described in
section 911 for such taxable year, and
``(B) makes an election under this paragraph.
``(3) Foreign earned income.--The term `foreign earned
income' has, with respect to a taxable year, the meaning given
such term in section 911(b)--
``(A) without regard to paragraph (2) thereof, and
``(B) if `during the taxable year' were substituted
in paragraph (1)(A) for `during the period described in
subparagraph (A) or (B) of subsection (d)(1), whichever
is applicable'.
``(4) Foreign unearned income.--
``(A) In general.--The term `foreign unearned
income' means income other than foreign earned income
that is sourced outside the United States.
``(B) Exception.--The term `foreign unearned
income' shall only include income from the sale of
personal property to the extent such income is
attributable to periods during which the individual was
a qualified nonresident citizen.
``(c) Exclusion of Gain During Time as Qualified Nonresident
Citizen.--There shall be excluded from gross income of an individual
any foreign unearned income from the sale of personal property to the
extent such income is attributable to periods during which the
individual was a qualified nonresident citizen.
``(d) Other Rules.--Rules similar to the rules of paragraphs (4),
(5), (6), (7), and (8) of section 911(d) shall apply for purposes of
this subsection.''.
(b) Conforming Amendment.--The table of sections for subpart B of
part III of subchapter N of chapter 1 of such Code is amended by
inserting after the item related to section 911 the following new item:
``Sec. 911A. Alternative for nonresident citizens of the United States
living abroad''.
(c) Nonresident Citizen Defined.--
(1) In general.--Section 7701(b) of the Internal Revenue
Code of 1986 is amended by adding the following new
subparagraph:
``(C) Nonresident citizen.--The term `nonresident
citizen' means, with respect to a taxable year, an
individual who--
``(i) is a citizen of the United States,
``(ii) has a tax home in a foreign country,
``(iii) is in full compliance with United
States income tax laws for the 3 previous
taxable years, and
``(iv) either--
``(I) establishes to the
satisfaction of the Secretary that such
individual has been a bona fide
resident of a foreign country or
countries for an uninterrupted period
which includes an entire taxable year,
or
``(II) is present in a foreign
country or countries during at least
330 full days during such taxable year.
``(D) Limitation on nonresident citizens.--The term
`nonresident citizen' shall not include any Federal
employee.''.
(2) Conforming amendment.--The heading of section 7701(b)
of such Code is amended by striking ``and'' and inserting a
comma and by inserting after ``nonresident alien'' the
following: ``, and nonresident citizen''.
(d) Effective Date.--The amendments made by this section shall
apply with respect to taxable years beginning after the date of the
enactment of this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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