A green card makes you a US tax resident, and the United States taxes residents on worldwide income. Rent from a flat in Mumbai, a dividend from a Hong Kong brokerage, a gain on a Sao Paulo apartment: all of it goes on Form 1040, whether or not a single dollar ever reaches an American bank. Residency starts on the first day you are physically present in the country as a lawful permanent resident, which for most EB-5 families is the day they land on the immigrant visa.
That date is the hinge. Nearly every planning move worth making has to happen before it.
When your US tax clock starts
Two separate tests can make you a resident. The green card test is the obvious one and bites from your first day of presence as a permanent resident. The substantial presence test can catch you earlier: count all your days in the current year, a third of last year's days and a sixth of the days from the year before, and 183 makes you a resident. Investors who spent long stretches in the country on a B-1/B-2 while the petition was pending are sometimes already tax resident before the visa is even issued. The IRS sets out both in its guidance on determining an individual's tax residency status and in the worked examples on the substantial presence test.
Your first year is usually a dual status year. Nonresident up to the residency starting date, resident from that point on, with only US source income taxed in the earlier part. Filing that year correctly is worth real money and is the single most common thing a general practice accountant gets wrong.
Worldwide income, and what that actually covers
Everything. Salary, business profit, interest, capital gains, rental income and pension distributions from any country are all reportable, and so are earnings inside a foreign company you control even when nothing is distributed to you.
Double taxation is usually avoidable. Form 1116 gives a credit for foreign income taxes paid, and the United States holds treaties with most major economies. Credits rarely wipe out the bill entirely, because US rates on some income run higher and because the credit is computed basket by basket rather than in one lump.
Your EB-5 investment generates a small tax event every year. Most new commercial enterprises are limited partnerships or LLCs filing Form 1065, and they issue you a Schedule K-1. You report your share of the enterprise's income whether or not cash reaches you, which catches investors whose preferred return is accruing rather than being paid.
FBAR and Form 8938 are two separate filings
People conflate these constantly and then file only one of them.
- FBAR, FinCEN Form 114. Required when your foreign financial accounts together exceeded $10,000 at any moment during the calendar year. It goes to FinCEN rather than the IRS, and it captures accounts you merely hold signature authority over. Filing mechanics are on the FinCEN page for reporting foreign bank and financial accounts.
- Form 8938. Attached to the Form 1040 under FATCA. A single filer living in the United States crosses the threshold at $50,000 of specified foreign financial assets on the last day of the year or $75,000 at any point during it, and a married couple filing jointly doubles both numbers. Scope is wider than FBAR and reaches foreign stock, partnership interests and certain insurance products with cash value. The regime is summarized on the IRS page for the Foreign Account Tax Compliance Act.
Penalties are the reason to take this seriously. The statutory willful FBAR penalty starts at the greater of $100,000 or half the account balance and is adjusted for inflation. In Bittner v. United States, decided in 2023, the Supreme Court held that the non-willful penalty applies per annual report rather than per account, which was a large reprieve for people holding a dozen small accounts.
The PFIC problem with foreign mutual funds
Here is the trap that costs EB-5 families the most money, and almost nobody hears about it before landing. Nearly every non-US mutual fund, unit trust or pooled investment product is a passive foreign investment company under American tax law. Gains and distributions from a PFIC fall into a punitive regime: the gain is spread back across your holding period, taxed at the highest ordinary rate for each of those years, then an interest charge is added on top. Reporting runs on Form 8621, one per fund per year.
Sell them before your residency starting date. After that, the elections that soften the regime are limited and the cleanup gets expensive.
Your business back home and Form 5471
Owning or controlling a foreign corporation turns into a reporting obligation the moment you become a US person, and sometimes into a tax bill. Form 5471 is filed with your return, and the GILTI rules under section 951A can tax you personally on the company's earnings even where nothing is paid out. Foreign trusts bring Forms 3520 and 3520-A. A gift or inheritance above $100,000 from a nonresident individual triggers a Form 3520 of its own, with a late filing penalty of 5 percent a month up to 25 percent of the amount.
Restructuring is usually possible and always cheaper beforehand. We go through the options in Managing Foreign Businesses and Assets After Moving to the US.
Where you land changes the bill
State income tax is a second, entirely separate decision. Florida, Texas, Nevada and Washington impose no personal income tax on wages, while a California resident faces a top marginal rate of 13.3 percent applied to worldwide income. Moving the family to San Francisco rather than Miami is a tax choice whether or not anyone frames it that way.
Estate tax is a third layer. A US domiciliary is exposed on the worldwide estate, while someone who is not domiciled here gets an exemption of only $60,000 before US situs assets are taxed. Domicile is a different test from income tax residency and turns largely on intent, which is why the two can diverge. US Estate Tax Implications for Wealthy EB-5 Investors covers the planning in detail.
Plan before the visa is issued
The United States grants no step-up in basis when you immigrate. An apartment bought for the equivalent of $200,000 and worth $1.2 million on the day you land keeps its original basis, and the whole million of gain becomes taxable if you sell as a resident. Selling and repurchasing before the residency starting date is the standard fix, and the foreign tax it triggers is usually far smaller than the US tax it prevents.
Other moves belong in the same window. Accelerate income into the pre-residency period, unwind PFIC holdings, review foreign pensions that may get no US recognition, and plan the money movement so a compliance officer at a US bank never has to guess. Transfer mechanics are covered in EB-5 Currency Transfers and US Banking, and the full checklist sits in Pre-Immigration Tax Planning for EB-5 Investors.
Handing the green card back has a price
Some investors decide after a few years that US residency does not suit them. Holding a green card in at least 8 of the last 15 tax years makes you a long-term resident, and section 877A applies when you give it up. That exit tax treats your worldwide assets as sold on the day before expatriation. It bites if your net worth tops $2 million or if your average annual net income tax across five years exceeds an indexed threshold. Failing to certify five years of tax compliance triggers it as well.
A quieter version of the same problem exists. Claiming treaty nonresident status on Form 8833 to escape US tax can be read as evidence that you abandoned permanent residence, and immigration officers do read it that way. The immigration side is set out in Maintaining Residency: Avoiding Green Card Abandonment. Naturalizing does not end any of it, since US citizens are taxed on worldwide income wherever they live.
Hire a cross border CPA before you land. Against an $800,000 investment and a lifetime of filings, the fee is a rounding error.