I funded a foreign family trust in 2023 and become a US resident in 2026 — is there really a deemed transfer on day one?
Three years ago, while I was still a nonresident, I moved shares of my company into a foreign family trust for succession planning. Next year I'm relocating to the US for good. A cross-border advisor told me the IRS will treat me as if I transferred everything to the trust on the day my US residency starts, because the original funding happened within five years of the move. That sounds bizarre — the transfer was made long before I had any US connection. Is this five-year rule real, and what does it actually require me to file?
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