[USER]

Tax optimization question…
I’m moving to the CNMI. The CNMI is a USA Commonwealth where the max federal income tax is 9% and no state tax.
I am in my upper 30s and married.

Household income should be about $150,000. Net worth is about 1.8 million broken down like this…
110,000 cash
860,000 brokerage

630,000 401k that I plan to rollover into an IRA.
110,000 Bitcoin
110,000 Roth IRAs.

While I have the chance is there anything I should do to pay taxes while it’s only 9% or should I just let everything ride as is?

I’m happy to answer any questions.

[Dan]

Note that assuming you’re retaining your U.S. citizenship you’ll still be subject to U.S. taxes.

Hopefully your new home country has a tax treaty with the U.S. (many do) so you can avoid double taxation.

[Jeremy]

With a max tax rate of 9% and no state tax, I guess transfer as much of that 401K via a backdoor Roth as you can!

You’ll probably never be in such a low tax position again.

I’m guessing a lot of people will start googling how to move to CNMI!

[Rick]

I agree with Bill that there is likely a requirement that you haven’t seen yet.

Otherwise many of us, and those far wealthier than use, would do a nice holiday trip to CNMI and use the heck out of that 9% tax cap and then go back to our previous life.

Puerto Rico (as a kinda sorta similar situation) has rules on assets at time of gaining residency kinda like a pay up to this point in time and fairly strict # of days on the island every year to keep its favorable tax treatment going forward.

[Nicholas]

Convert to Roth… sell from brokerage and fund Roth IRA for you and spouse

[Bill]

Consult a local cpa when you get there. I would be pretty shocked if you could do unlimited Roth conversions and capital gains and have a 9% cap.

All the billionaires would live there a year just to save $100 million in tax.

[Alex]

I’d seriously look into ROTH conversions while in the lower tax area.
Also, if you have large capital gains consider selling and repurchasing to get a higher basis.

Both I’d consult a professional more familiar with CNMI tax.

[Ernest]

Why stop at 9%? There are jurisdictions with 0% income/cap gains/etc. tax. Ps, what’s the VAT/sales tax rate?

[Author]

Posts