I work in finance (not a tax professional) but have seen many colleagues struggle with similar situations. Beyond the tax implications, also consider the practicalities of maintaining these foreign investments after becoming a US person. Many UK investment platforms have started closing accounts of US-resident clients due to SEC regulations. Check whether your employer's scheme has provisions for US persons or if you'll be forced to sell when you move. This could affect your tax planning strategy significantly.

I went through a very similar situation with my Swiss employer's share scheme when I moved to the US three years ago. The combination of foreign trust reporting and employee share schemes is genuinely complex, but there are a few key points that might help ease your anxiety. First, the good news: not every foreign employee share arrangement is automatically classified as a "foreign trust" for US tax purposes. The IRS looks at factors like who has control over the assets, whether there's a separate legal entity, and the specific rights participants have. Many employee share schemes are treated more like deferred compensation rather than trust distributions, which can significantly simplify the reporting. Regarding the Throwback Rule - while it's scary to read about, it typically applies when you receive actual distributions from a foreign trust that has accumulated income over multiple years. If your shares are simply appreciating in value but you haven't received distributions, the Throwback Rule might not be your immediate concern. My advice would be to get the exact legal structure of your Guernsey arrangement analyzed before you panic. I used a specialist who determined that my Swiss arrangement was actually treated as unvested compensation rather than a foreign trust, which eliminated most of the complex reporting requirements I was worried about. Also consider whether you can make any strategic moves before establishing US tax residency - the timing of when you become a "US person" for tax purposes can make a substantial difference in your overall tax burden.

17 Has anyone tried calling the IRS about HSA questions? I tried using their official phone number for tax form questions, and after waiting on hold for an hour, the representative seemed confused about Form 8889 themselves and gave me information that contradicted what my tax software was saying about pretax contributions.

I had this exact same confusion last year! The key thing to understand is that Form 8889 and Schedule 1 are designed to capture ALL HSA activity for reporting purposes, even if some contributions have already received tax benefits. Your $3,650 showing up on Schedule 1 line 13 isn't giving you a double deduction - it's just documenting that these contributions occurred. Since they were pretax payroll deductions (as shown in your W-2 Box 12 code W), your taxable income was already reduced when your employer processed your paychecks. The IRS wants a complete picture of your HSA transactions, so Form 8889 reports everything, then the tax software correctly calculates that you don't get an additional deduction for amounts that were already taken pretax. You can verify this by checking that your AGI reflects only the income after your pretax HSA contributions were removed. TurboTax is handling this correctly - you're not making a mistake or getting an improper benefit. This is just how HSA reporting works!

I'm a bit late to this conversation but wanted to add that understanding this hierarchy is super important for actual tax planning! My accountant saved me thousands last year by relying on a Tax Court decision that contradicted an IRS publication. He explained that court decisions outrank IRS publications in the hierarchy, so we were on solid ground taking the position. The IRS initially questioned it during review, but once we cited the relevant Tax Court case, they accepted our position. Just shows why knowing which authorities take precedence matters in real-world situations!

This is such a great question and the responses here are really helpful! As someone who struggled with this concept in my tax law course, I'd add that it's crucial to remember that the hierarchy can get complicated in practice. One thing that helped me was understanding that while the Internal Revenue Code is the primary statutory authority, Treasury Regulations come in two types: interpretive regulations (which explain existing law) and legislative regulations (which Congress specifically authorized the Treasury to create). Legislative regulations carry almost as much weight as the IRC itself. Also, don't forget about the practical side - even though court decisions are lower in the hierarchy than the IRC and regulations, if there's a recent Supreme Court or Circuit Court decision that interprets a tax provision differently than an old regulation, practitioners will often follow the court decision until the Treasury updates the regulation. The key is understanding not just the theoretical hierarchy, but how it works when sources conflict with each other in real situations!

Don't forget when you file your taxes with a missing or reconstructed cost basis, you need to check the appropriate box on Form 8949. There's literally a checkbox for "Adjustment code B" which is for when the cost basis wasn't reported to the IRS. Then attach your basis calculation to your return. Without proper documentation, the IRS might assume your basis is $0 and tax you on the entire proceeds!

I've been through this exact scenario with inherited stock from the 1980s. Here's what worked for me after getting completely overwhelmed by all the corporate actions: First, don't panic about getting it "perfect" - the IRS understands that reconstructing basis from decades ago is challenging. The key is making a reasonable, documented effort. Start with your $1,100 original investment and work chronologically through each corporate action. For each stock split, divide your per-share basis accordingly. For the acquisitions, you'll need to find the exchange ratios (usually available in SEC filings or company investor relations). The spinoff is trickiest - you'll need the basis allocation percentage between the parent and spun-off company. Pro tip: Call the current company's shareholder services department. They often have detailed historical information specifically for tax basis calculations, including basis allocation percentages for spinoffs. I was surprised how helpful they were. Document everything you find and your calculation method. Attach this to your return along with Form 8949 using the appropriate adjustment code. Even if your numbers aren't perfect, showing good faith effort with documentation will protect you if the IRS has questions. The worst thing you can do is just guess randomly or report zero basis - that guarantees problems later!

I'm confused about the child tax credit situation with Form 8332. If I let my ex claim our kids using this form, does that mean they get ALL the tax benefits? Or do I still get some of them?

Just want to add one more tip that saved me a lot of trouble - make sure you keep detailed records of when you give the completed Form 8332 to your ex. I take a photo of the signed form and send it via email so there's a timestamp, then also give them the original. Last year my ex lost the form right before filing and we had to scramble to get another one signed. Having that digital backup with the date stamp helped prove I had provided it on time. Also helped when the IRS had questions later - I could show exactly when the form was completed and delivered. The whole process is stressful enough without having to worry about lost paperwork!