R2I-R2A....R2I thoughts

[Chakravyuh]

Everything seems to be a blur now but as I put pen to paper , things do seem to come back that I think I do need to share. There are a couple of diaries out here that I have created in the past with the r2i planning (sometime in 2009)and r2a(2013) but I have not posted since quiet sometime back due to lack of motivation. After a few months of staying away from the forum, I could not help but gravitate back to the forum and also given some of the hotly contested debates and r2i experiences. Since my perspectives have changed and given the recent threads that I can relate to (how much is enough, r2i after kids settled etc.), I decided to write a fresh one.

So in a nutshell, I returned to India with a GC in APR 2012 (planning since 2009) with hopes of never returning back. I had wiped the slate clean and sold my car, home at a loss, shipped my furniture et al. But like some of you, I developed cold feet nearing about a year and although wife and kid were settling down well, I turned my back. Call it a fickle minded decision or whatever, I could not resist the urge to come back.

On hindsight, I think I had a very good experience and should have probably stuck a bit longer. Main driver I think was financial situation but probably other reasons played a role too. Brainwashed DW a bit and came back to USA in Feb 2013. My company was kind enough to accommodate and
since I had achieved their objectives in a span of 1 year what my company wanted in 2 years, it was easy to convince them. Moved into an apartment after a 2 week hotel stay, purchased a brand new car. My wife and kid followed suit right after the final day of school in 3rd grade. Just before the one year time-limit passed with us out of the country on a GC. My kid went to NAFL and overall the experience was very positive. Since the school years were different, we decided to put my kid in elementary school for a couple of months. Since we did not really like living in an apartment,
I also made a decision to buy a house immediately and made plans for that. We were ok for a few months we were without any furniture as my company paid only for the ticket, but one by one, we started to accumulate stuff from Ethan Allen, Pottery barn etc. So it was like laying the roots back again in April 2013 and with a vengeance in fact. Yeah, We made the deal for a new home to be built and heaved a sigh of relief. We did not consider the r2i as a failure(maybe it was) because it gave me very good experience on hindsight.


But one thing really changed quickly in a couple of months after I came back. I got the dreaded night call from India that my dad was ill. It was unusual because he had never fallen sick and in the prime age of 86 was quiet independent going about his things. Soon things deteriorated so fast that he passed away in couple of weeks in the month of July. Never imagined it would end up like this and I do remember, when I left, I did not even do the customary bow and had just said good bye. He had shaken hands with me and enquired as to when I would be back. Since he was hard on hearing, I wrote on the small whiteboard 'Going back for good.' He sighed, smiled and said 'Best of luck'. The tears have dried up and I am trying to reconcile things by reflecting on the good times. Around the same period , at least 3 parents in my immediate family (relatives) passed away and so also a couple of friends' parents. They were just dropping off like fruits on a tree. Just stuck me that we take things for granted but assume always the good but never prepared for the worst.

Anyways, We are kind of settled now but given the experiences, sowing the seeds of r2i again. It seems to be lurking at the back of our minds and sometimes come right up in some discussions. So we know are kind of heading back again but issue of timing. We want to give some kind of stability to DD so maybe she will do middle school here after all. Back at work, I was out for a dinner with a client who makes a annual trip to India to scout for vendors and one thing that stuck me was when they remarked 'Every year we go to Bangalore and Chennai, we see so many changes. It is remarkable. We truly believe it will be the Asian century'. They asked me why I came back and I just made some stuff up but one of the clients who I know a long time told me 'It does not make sense for you to have come back but anyways I hope you settle down quickly'. Interactions like these seem to reinforce the contrary.


Some the not so good experiences after coming back:

New home experience :
The nation wide luxury builder could not deliver on time and customer service was horrible and the fine print made sure that the builder had no binding to stick to the contract. So ended up extending the lease losing some additional money. We finally moved in March 2014 to our new home and settling down. So much for customer experience !.

School :
Not been very happy with the public education system or the environment , even though district 196 is supposed to be very great. My kid came back home one day very sad and when we asked , she goes ' My friend's dad is separating. She hung on to my shoulders and crying a lot in the afternoon. Please promise that you will never seperate '. It was heart breaking to hear but then this thing is so common. DD had a child hood friend and we were very close with their family but to my dismay, what seemed to be a perfect marriage was on the rocks. After we moved to India, in a couple of months the parents separated and I had decided not to tell that to my daughter who was insisting to take me to their place and meet the kid. Anyways this divorce thing is so common that it is just like use and throw. Even my realtor who had like 5 boys and after more than 15 years of marriage decide to break free and hooked with a new partner. An other guy just walked way after 2 kids because he did not want to deal with kids anymore. Anyways they all seem to enjoying their lives but it just baffles me how easy it becomes
for the parents to get rid of each other and let the kids suffer. The system sees to be just so broken. Just read a mpr article which seems to reinforce the same thing and explains why more number of men after the age of 40 are dropping out of the workforce. It is just some of these things that I seemed to not care so much , suddenly seems to bother me.

An other day kid comes back sad and says a boy in the class called her and an other kid 'Lesbians'. Yikes!. Just 5th grade for Pete's sake. She gets into middle school and not sure how worse it would be. From education wise, Not sure it was a good decision to come back to this sick environment !.

Work : Ok , no complaints yet but have hit a brick wall in terms of growth. Just taking in my stride , don't hope to grow in the organization but happy to have a job and I am sure it will help when going back. With DW picking a job as well, the finances seem to coming back on track. We have the flexibility
to take a transfer back to Desh anytime I want. So it looks like we have 2 to 3 years to bide some time or Max of 4 years. Coming to the rescue, we are getting some additional time to spend time in the summers by working from there given our personal situations. So we could spend 8 weeks in India with the vacation thrown in. So cannot wait for summer to arrive.

Parents :
DW's dad is not well and seems to be wearing down quiet a bit. My mom although generally being ok, slipped and fell and broke her wrist last week. It was tense for a couple of days and given her heart condition, my siblings took the decision to get her the Puttur treatment. Seems to be doing Ok and improving now.

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Oh well, it is what it is. I just wish I did not have the dilemma and wished I was more strong in my conviction when I headed down there. 2 of my friends who left around the same time seems to have made out very well back in India but they do have the US citizenship unlike me. Looking back I think , It is better to have the citizenship to make r2i work!.

So, For those who have made it back to India, Congratulations.
For those of you sitting on the fence, Well, Good luck making your plans and some quick decisions.
Wish you all a very happy new year.

[s_tand]

Oh well, it is what it is. I just wish I did not have the dilemma and wished I was more strong in my conviction when I headed down there. 2 of my friends who left around the same time seems to have made out very well back in India but they do have the US citizenship unlike me. Looking back I think , It is better to have the citizenship to make r2i work!.

So, For those who have made it back to India, Congratulations.
For those of you sitting on the fence, Well, Good luck making your plans and some quick decisions.
Wish you all a very happy new year.

Dear Friend,

Thanks for sharing your thoughts and letting your emotions out and trust me you're probably not alone with dreams/aspirations of a more successful 2nd innings of R2I after a what I would call a un-successful R2A rather than un-successful R2I and this includes me as well.

Just to share my journey if that makes you feel any better - have always been reluctant on acquiring USC (more on this later) eventhough have been eligible for a long time so R2I'ed in 2011 with GC with no plans of coming back but on DW insistence got a REP . Was able to continue relationship with US client from India as well but having experienced one of the worst times in india's history and with all the uncertainity developed cold feet on giving up on GC so came back to renew REP in 2013.

Lost my grandma at 92 who was in perfect health just a week after I landed here so had to rush back but glad that my kids got to spend 2 yrs of their lives with their great grandma . Seeing so many of of R2I'ers coming back with the USC insurance and the higher education scene / US influence in society in general we also thought of staying back for 4 more yrs with the risk of R2I'ing again when my elder daughter would be half way through highschool (finishing up 10th). And then six months in the same year later in Dec'2013 lost my uncle (father's younger brother @ 63).

It was a very tough 2013 emotionally and made me wonder of my/our decision not that I could have avoided these from happening by being there but could have been with family in these times.

Our biggest concern continues to be higher education of kids (both girls 13 and 7)and from what I gather many potential R2I'ers have chosen to stay back for this as one of the key reasons or R2A'ed for kids college when the time comes.

I am having a hard time overcoming this near future challenge and being guilty of denying opportunities to kids. At the same time while USC seems to be a no brainer to many on this forum I have always had my doubts both due to emotional and practical reasons.

I do not intend to scare anyone with USC or planning to get one in future but please do your due diligence on FATCA / OVDP / FBAR etc. before taking the plunge now that FATCA is knocking on the door for India. I am seeing retired parents of our generation in India joining the GC bandwagon on kids (who are settled here) insistence when they're not sure of where they want to finally spend the penultimate years let along all the FATCA/Tax Rtn/FBAR requirements.

Here are some links to educate for those of you who would like to learn more about this and what you could potentially be settting up yourself against should you choose to R2I after USC - the financial implications seem too harsh for the perceived opportunity/insurance that most of us (and Uncle SAM too) tend to view for non-US-resident USC's as . No wonder the cost of renunciation went up 4-5 fold recently. A simple back of env. calc. based on what they have netted so far ($6 billion from 43K individuals) even assuming a recovery rate of 50% from the 7.6 million worldwide comes to $400 billion - a huge opportunity worth policing the financial institutions of the world and CPA's/Tax Lawyers of course.

I would post these links in other relevant threads as well to spread more awareness and if I am not mistaken this impact's not just GC/USC but also H1's who spend >180 days here since they become resident for tax purposes .

http://businesstoday.intoday.in/story/fatca-us-federal-law-irs-foreign-investors-united-states-us/1/211949.html
http://articles.economictimes.indiatimes.com/2014-12-29/news/57495038_1_fatca-iga-indian-financial-institutions
http://economictimes.indiatimes.com/news/economy/foreign-trade/india-gets-a-month-more-to-sign-fatca/articleshow/45655939.cms
http://www.forbes.com/sites/robertwood/2014/06/03/irs-nets-offshore-data-from-77000-banks-70-countries-in-fatca-push/
http://apps.irs.gov/app/fatcaFfiList/flu.jsf : List of Inst. In India ? 442 so far.
http://www.ingvysyabank.com/IngBlog/Media/PDF/FATCA-FAQ-v1.pdf
http://www.iba.org.in/Documents/FATCA00020_062014.pdf
http://www.iexpats.com/us-expats-launch-fatca-legal-challenge/
https://fatcalegalaction.com/media/in-the-news/
http://isaacbrocksociety.ca/

Would love to hear others opinions on this issue to help me get some clarity in my thinking.

[pskum]

While i agree that FATCA/FBAR etc add more paper work and care for compliance, i think it may not impact for majority of people.
It will be pain for business owners who thus far used to take lot of advantage of non-disclosure or tax loop holes, or have lot of assets that are covered by FATCA (remember real estate is not covered).
As India is one of the countries that signed Model agreement, Individual need not worry about FATCA compliance as banks would furnish the required data to GoI and GoI will share it to USA and it will be mutual. With this arrangement, US will not be doing 30% hold on any payments made through indian banks.

FBAR is a pain but may not be hard to comply.

thanks
kumar

[Imissindia]

While i agree that FATCA/FBAR etc add more paper work and care for compliance, i think it may not impact for majority of people.
It will be pain for business owners who thus far used to take lot of advantage of non-disclosure or tax loop holes, or have lot of assets that are covered by FATCA (remember real estate is not covered).
As India is one of the countries that signed Model agreement, Individual need not worry about FATCA compliance as banks would furnish the required data to GoI and GoI will share it to USA and it will be mutual. With this arrangement, US will not be doing 30% hold on any payments made through indian banks.

FBAR is a pain but may not be hard to comply.

thanks
kumar

FBAR and other related draconian laws are a very heavy burden if one wants to obey them to the letter of the law. Many folks are ignorant of the requirements and thus discount the burden placed on an individual by these reprehensible measures.

One simple example: USC child asks his parents to become GC holders. Parents agree thinking it will solve visa issues. Parents have a tax free provident fund after years of work. They also have mutual fund holdings, again tax free in India. They have some rental income properties that they purchased long time back. They also have 5-6 bank accounts with FDs worth say 1-2 Cr. Perhaps there is a small business that was in the family and is now run by one of the Indian resident brothers but the dad's name is on the papers and bank accounts. None of this income or assets are connected to the USA and the parents earn no money in the USA. Now they would be required to pay PFIC taxes on their mutual fund holdings in India, their provident funds and pension plans would incur tax- FBARs would have to be filed. All bank accounts would have to be reported, FBARs filed, taxes paid for interest incomes. The rental income would have to be taxed and disclosed. The family business would have to disclose its income and bank accounts as a US 'resident' is a signatory. Tax returns would be filed in both nations. All this can lead to considerable hardship, financial loss and draconian penalties for lack of compliance. If a person has significant assets then it becomes even more difficult. Of course many are not aware and thus not in compliance but that doesn't change their potential liability.

Business owners with "undisclosed assets" do not have as much to fear as they are already hiding their income from local authorities. It is actually people with legal and disclosed incomes that would bear the brunt.

[Old-Spice2]

FBAR and other related draconian laws are a very heavy burden if one wants to obey them to the letter of the law. Many folks are ignorant of the requirements and thus discount the burden placed on an individual by these reprehensible measures.

One simple example: USC child asks his parents to become GC holders. Parents agree thinking it will solve visa issues. Parents have a tax free provident fund after years of work. They also have mutual fund holdings, again tax free in India. They have some rental income properties that they purchased long time back. They also have 5-6 bank accounts with FDs worth say 1-2 Cr. Perhaps there is a small business that was in the family and is now run by one of the Indian resident brothers but the dad's name is on the papers and bank accounts. None of this income or assets are connected to the USA and the parents earn no money in the USA. Now they would be required to pay PFIC taxes on their mutual fund holdings in India, their provident funds and pension plans would incur tax- FBARs would have to be filed.

Do not forget the fees you pay CA/tax professional to file US taxes every year. For retired person that is lot of money. If you want to own a business in India, then USC is really draconian.

As FATCA rule gets implemented, I expect many Indian banks to close the account of USC/GC living in India. Already few MF have decided not to accept USC/GC clients irrespective of where you live.

[AverageIndian]

Don't you think for the benefits of acquiring GC/USC and living in the US:

such as clean air/ freedom from contagious diseases (I still see frequent cases of cholera, typhoid, dengue in India),

hazzle-free day to day dealings,

and most importantly TIMELY access to emergency medical care;

there is a small fee one has to pay..

[rajradio]

Don't you think for the benefits of acquiring GC/USC and living in the US:

such as clean air/ freedom from contagious diseases (I still see frequent cases of cholera, typhoid, dengue in India),

hazzle-free day to day dealings,

and most importantly TIMELY access to emergency medical care;

there is a small fee one has to pay..

What is the small fee one pays for health care in the USA?

[Imissindia]

Don't you think for the benefits of acquiring GC/USC and living in the US:

such as clean air/ freedom from contagious diseases (I still see frequent cases of cholera, typhoid, dengue in India),

hazzle-free day to day dealings,

and most importantly TIMELY access to emergency medical care;

there is a small fee one has to pay..

The debate isn't about living in the USA. The point raised was about the implications of becoming a USC/ GC if you are NOT going to be living in the USA by moving to India.

[AverageIndian]

What is the small fee one pays for health care in the USA?

If elderly parents are sponsored for GC, they get an almost complete coverage under Obamacare, for less than a few hundred $ a month. Compare this to fees, sometimes in lakhs, for a procedure in India. Hospitals won't even admit/stabilize the patient before seeing the cash up front.
Do you think a system comparable to 911 exists in India? In an emergency, everybody will be wondering with 'glazed eyes' what to do next.

[AverageIndian]

The debate isn't about living in the USA. The point raised was about the implications of becoming a USC/ GC if you are NOT going to be living in the USA by moving to India.

Even if they are not going to be 'living' in US, they will be utilizing US's resources during their visits, right? If they are never even going to even visit, why bother getting GC?