Selling appreciated assets before you become a US taxpayer

The United States taxes gain, not appreciation during residency. There is no reset when you arrive. Thirty years of growth on a property or a shareholding abroad, realized in month two of US residency, is taxed as though every dollar of it accrued under US jurisdiction.

Selling and repurchasing before the residency start date crystallizes the gain under the rules of your current jurisdiction and gives you a new, higher cost base for US purposes. Where local tax on the disposal is low or nil, the cost of the exercise can be a fraction of the US tax avoided.

The wash sale rules that would otherwise restrict an immediate repurchase apply to losses, not gains, so a genuine sale and repurchase of an appreciated position is generally effective, but the transaction has to be real, priced at market, and documented.

• Illiquid holdings in a closely held company, where a sale to a related party invites scrutiny on both sides.
• Assets in jurisdictions with an exit or disposal tax that exceeds the future US cost.
• Retirement and pension wrappers, where the reset is unavailable and treaty analysis governs instead.
• Real property, where transaction costs and local transfer taxes often outweigh the benefit.

US tax is computed in dollars. An asset that has not moved in local currency can show a large dollar gain purely from exchange rate movement, and on a foreign mortgage, repaying the loan after the dollar strengthens can produce taxable gain on the debt itself.

Brokers take weeks to open accounts and settle trades. Company sales take months. Local tax clearances take longer. The analysis is often straightforward; the execution is what runs out of time. Work back from the earliest possible residency start date and give the transactions room to complete.