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@Fentium, do you have a link that you can share the details?  There are already IRS unrealized capital gain taxes rules.  The details are important as the IRS taxes on unrealized capital gain taxes are based on gross income.  If the payment in US are greater than the equivalent assessment in Brazil, it will be important to know if there will be credit against other income in Brazil.

Thank you.

@Pablo888I came across this in May 2023 and looking for more details or updates.

Thank you @Fentium.  The following section:

According to the text, income obtained abroad from financial investments will be taxed upon the sale or maturity of assets, while profits and dividends from controlled entities will be taxed on Dec. 31 of each year. The measure also includes the taxation of assets in trusts.

Income up to 6,000 reais ($1,203) will be tax exempt, while income above that but below 50,000 reais will be taxed at 15%. Income exceeding 50,000 reais will be taxed at 22.5%.

seems to point to taxation of realized capital gain ("upon the sale") which is already taxed in the US.  The long term capital gain for 23-24 is between 0 to 20% based on income.  The short term capital gains are based on annual gross income.

It seems that you will have to worry about tax payment to Brazil for sale of assets exceeds R 50,000.  Also since this law is applicable to US trusts, I think that you have to make sure that the trustees living in Brazil do not receive income, I think that the RFB will need to be informed of that trust transaction and that the trustee tax resident should not be subject to taxes.

However, if the tax resident has received income from realized capital gains, then they will be subject to taxation.  As usual, there are only 2 certainties in life - death and taxes.

What I am more worried here is taxes on unrealized capital gain that is due at the time of purchase rather than sale.  In the US, there is already taxes due on securities at the time of purchase when there is a difference between the purchase and market price.  If this is also the case in Brazil w.r.t foreign assets, then there is a chance of double taxation.

    Thank you @Fentium.  The following section:
According to the text, income obtained abroad from financial investments will be taxed upon the sale or maturity of assets, while profits and dividends from controlled entities will be taxed on Dec. 31 of each year. The measure also includes the taxation of assets in trusts.

Income up to 6,000 reais ($1,203) will be tax exempt, while income above that but below 50,000 reais will be taxed at 15%. Income exceeding 50,000 reais will be taxed at 22.5%.

seems to point to taxation of realized capital gain ("upon the sale") which is already taxed in the US.  The long term capital gain for 23-24 is between 0 to 20% based on income.  The short term capital gains are based on annual gross income.

   

    -@Pablo888

Income (renda) and capital gains (ganhos de capital) are  two very different things for tax purposes. I don't know the answer to the question, but I doubt that it lies in a confusing English text.

@jonesio, agree that the preferred source would be from the RFB.  Anyone has a link to that source?

@Fentium,  I was bothered by not knowing how the Brazilian government would treat unrealized capital gains in the US.  By this I am referring to stocks that vest but are not sold (not rental income which is pure income). 

Then it occurred to me that one solution to this problem is to gift those stocks.

The IRS allows gifting of stocks to a variety of causes ->

Obviously the initial vesting tax liability (i.e. between exercise and option) will still be due (unavoidable) but what happens to the stock after will be the responsibility of the gift receiver.  I know so many people who have exercised stocks and paid the unrealized capital gains taxes and when the stocks became worthless, then they got saddled with tons of capital losses.  Gifting will make sure that you won't have to worry about that.

The obvious 2 reasons to choose the gifting option - a) one less worry about tracking this investment esp. when the cost of tracking exceed the actual benefit and b) you will have the continuous goodwill / friendship / gratitude of the ones that you are giving to.

Just one option among many....