> The exit tax only applies to tax the built-in gain (appreciation) of Eduardo's assets at the time the renunciation is effective, but not to the sale of his Facebook stock itself. In law, little technical details like that matter.

Is that describing a different end result than the way I described it? recap:

>> on the day that he loses his US citizenship, US-Eduardo sells all his things to Singapore-Eduardo at fair market price. Thus, he pays capital gain taxes up until that day

Alternatively, assume US-Eduardo sells it to his cousin Singapore-Eduardo2, pays capital gain taxes to the US, and -- once no longer a US citizen, gives the remaining money back to cousin Singapore-Eduardo2 as a gift, and cousin Eduardo2 gives the shares back to Eduardo (now Singapore-Eduardo) as a gift. Singapore has no gift tax, so this is probably kosher with Singapore (I'm not familiar with Singapore tax law, but I know of other jurisdictions in which this is perfectly fine).

There is a complete disconnect between appreciation until denunciation and appreciation(or depreciation) after that date, while the overall effect for everyone involved is exactly the same, and everything is legal in all jurisdictions. Practically, this is what is happening.

> The hubub is about the appreciation between the renunciation effective date, when Eduardo paid taxes on his Facebook stock, and the IPO today/tomorrow, when he sells that stock. That appreciation is not taxed by the U.S., nor by Singapore

So, it's a hubbub about envy and nothing else. Had he done that a couple of years ago, or a couple of years from now, no one would have cared; or if there was no hype about a 25% increase, which would mean there were essentially $0 to be collected. It's only because people believe that luckily for him, the week his denunciation was accepted (note: he applied for it 8 months ago!), the stock jumped 25%, and that he has a chance to realize that profit next week.

> and that is the appreciation that the Senator is attempting to capture with his crazy law.

Now it is a crazy law. And just a few posts ago, you seemed to be supportive of measures that would tax saverin better... interesting.

> If the value of the facebook stock had gone down between the time he paid taxes and the time he sold, he would have be able to recover that money on his U.S. tax return for 2012

That is news and surprising to me. I'll take your word for it, since you are the expert (I just pay experts too much to do my taxes, and don't claim to have comprehensive understanding).

But that just means that there's a bug in the tax code that needs fixing:

If I'm not mistaken, if you become a US tax payer in september, you don't have to pay taxes for gains earlier that year, and you cannot take credit for losses earlier - only from the date you became a tax payer. The symmetry would require that you should not be able to take credit for losses after losing your tax payer status, just as you don't have to pay for gains after losing that status. Apparently there's a bug, and that's what needs to be fixed -- not introduction of new laws. They have until the end of the year to fix it.

Also, if there were no deals in facebook shares that week, the IRS should be able to claim the value was already IPO-high at the day of renunciation, and if challenged, a court might even find that reasonable.