AACI protests ‘major flaw’ in US estate tax

Association of Americans and Canadians in Israel says estate tax unfairly discriminates against many US citizens living abroad.

July 9, 2012 23:10
1 minute read.
Your Taxes

Your Taxes_311. (photo credit: Thinkstock/Imagebank)


Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analyses from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user experience almost completely free of ads
  • Access to our Premium Section
  • Content from the award-winning Jerusalem Report and our monthly magazine to learn Hebrew - Ivrit
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief

UPGRADE YOUR JPOST EXPERIENCE FOR 5$ PER MONTH Show me later Don't show it again

The Association of Americans and Canadians in Israel has appealed to the US Congress to correct a “major flaw” in the estate tax, which it claims unfairly discriminates against many US citizens living abroad.

AACI national president Asa Cohen wrote to House Ways and Means Committee Chairman Dave Camp last week, pointing out that the estate-and gift-tax exclusion for US citizens and green-card holders is capped at $5,000,000, while the exclusion for nonresident aliens is limited to only $60,000. Since 1988, Cohen said, the exclusion for citizens and green-card holders has grown almost eight-fold, but the nonresident exclusion has not changed.

Be the first to know - Join our Facebook page.

Many of the 180,000 US citizens who reside in Israel are married to nonresident aliens, and many of these couples have bank accounts and investments in the US as joint tenants, Cohen wrote. They often wrongly assume that the exclusion applicable to one spouse’s estate is also applicable to the other spouse’s estate and are “flabbergasted” to discover that the exclusion is only $60,000 and that they are subject to a heavy tax.

“The situation is not only fundamentally unfair, but dangerous,” Cohen wrote. He warned that if nonresidents with bank or brokerage accounts in the US discover the “woefully inadequate exclusion,” there may well be a large number of accounts removed from US banks and brokerage houses and taken abroad. In addition to posing a risk to AACI members, he added, this will also have an obvious impact on the American economy.

Related Content

The Teva Pharmaceutical Industries
April 30, 2015
Teva doubles down on Mylan, despite rejection