What Can We Learn From Tina Turner?

The Queen of Rock and Roll, Tina Turner died in 2023 after living a cross-border life. Residing in Switzerland for years, Truner married German music executive Erwin Bach in and later signed paperwork relinquishing U.S. citizenship. 

So, what can we learn from this expatriate estate example?

We can talk all about the Internal Revenue Code Section 2801. And, because I’m a lawyer, I’m going to interrupt this newsletter to give a BIG disclaimer that I am NOT giving any tax advice and you deserve to have a long conversation with your accountant if you have any questions regarding this IRSssy newsletter.

On January 10, 2025, the IRS finally issued the regulations for IRS Code §2081(originally enacted in 2008) and in January of 2026, a final Form 708 was issued and posted. We now know what to do….sorta’. The §2081 tax is designed to capture certain gifts and inheritances received from people who gave up U.S. citizenship or long-term residency “covered expatriates.”  For years, the rule existed, but the practical details were not exactly light reading (shocker!).  It’s a good time to be alive as the IRS finalized the regulations clarifying how the tax applies.

This inheritance tax is designed to be paid by the US BENEFICIARY of the gift or inheritance, and not by the TRUST at the highest estate or gift tax rate in effect at the time of the transfer (40% in 2026). So, if a family has international ties, foreign trusts, foreign trustees, or relatives who gave up U.S. citizenship or long-term residency, it’s going to be very important to review the estate plan (and include the accountant) before money starts moving across borders.

So, there you have it. We learn that the US does in fact have an inheritance tax (not to be confused with an estate tax). We also learn that if you’re a US beneficiary and recipient of an inheritance (or gift) from a trust that was created by a former US citizen, then you (not the trust or estate) may be subject to the 40% §2081 tax. Yikes!