I'm Australian. I've lived in the US long enough now that I am treated as a US tax resident -- worldwide income, foreign assets, the whole shebang. I have to report and pay capital gains tax on my compulsory retirement savings in Australia, which I cannot transfer here or withdraw, because of an oversight in the US-Australia tax treaty.
Yes, it's absurd. But even in the matter of a few hundred bucks it is not worth messing with the IRS. There is too much to lose.
You have to pick your battles. Trying to sneak past capital gains tax illegally is bitpenny wise and pound foolish. If you don't like the tax laws, do what everyone else has to do and get elbow-deep into the messy, uncomfortable and morally challenging world of representative democracy.
Either way, I'll report and pay whatever my agent says is correct.
I still find it a little disconcerting I could renounce my citizenship and still owe taxes on things I sell years later. I get why (and in this case I feel it's largely moral), but that's quickly getting into big brother new world order level stuff. I feel it's enough "punishment" to lose the benefits of being a US citizen and holding a US passport. If the world ever goes to shit, those folks will have no place to turn for even basic human needs and protection. They will quickly find out what most of the world feels about carpetbaggers.
You owed tax at the time, is the point here.
> I get why (and in this case I feel it's largely moral), but that's quickly getting into big brother new world order level stuff.
FATCA in particular has probably done more harm than good.
But if you want to live in the US, if you want to spend significant time in NYC or SF or Dyersville, Iowa, then federal, state and city taxes are the price of admission. If you don't, then sure: consult a lawyer about your options. He or she will probably counsel to not commit tax evasion.
But if the tax law says the gain event is selling the asset, then there is absolutely nothing morally wrong with exploiting this tax loophole.
It's a travesty that it exists in the first place (as it was when Apple exploits Irish law), but the laws are written by the government that no individual can control. If the laws create a loophole, it's legal (obviously) and ethical to step through it.