French Dual-Citizen at Stripe: US + France Cross-Border RSU Treatment

Julien is a dual French and US citizen working as a senior engineer at Stripe in San Francisco. He grew up in Lyon, moved to the US for a Stanford PhD in 2015, and naturalized in 2022. His parents still live in France, and he inherited a Paris apartment in 2023 that generates rental income. His Stripe equity is a mix of ISOs and double-trigger RSUs. France wants to tax his French-source income; the US taxes his worldwide income because he is a citizen. Managing the overlap requires careful treaty analysis and coordinated filing in both countries.

Situation

His position:

Stripe equity: 4,200 double-trigger RSUs and 1,800 ISOs.
Stripe base: $295k plus target bonus.
French real estate: Paris apartment inherited 2023, rental income €32,000/year, rental expenses €8,000, net €24,000.
French bank accounts: €180,000 aggregate.
French PEA (Plan d’Epargne en Actions): holding €45,000 of French stock, tax-advantaged in France but potentially problematic under US PFIC rules.

Key US filing requirements for his situation:

Form 1040 reporting worldwide income.
Form 8938 (Statement of Specified Foreign Financial Assets) if foreign financial assets exceed $50,000 at end of year or $75,000 at any time (single) or $100,000/$150,000 MFJ threshold.
FBAR (FinCEN Form 114) if aggregate foreign accounts exceed $10,000 at any point in the year.
Form 8621 (PFIC reporting) for his PEA mutual funds if they are classified as Passive Foreign Investment Companies.
Schedule E for the French rental.
Schedule B for foreign accounts.

French filing requirements:

French tax residency determination. Julien lives 340+ days per year in the US, holds his primary home in San Francisco, has most economic ties in the US. Under the US-France treaty Article 4, he is a US treaty resident.
Non-resident French filing (Form 2042) for French-source income only.
French real estate income taxed in France as French source; US credit available.

Under the US-France tax treaty (1994, amended 2004, 2009):

Article 14: employment income is taxed in the state where services are performed. Stripe RSU income, sourced to US work location, is US-taxable primarily; France gives credit.
Article 6: real estate income is taxable in the state where property is located. French rental is French-taxable primarily; US gives foreign tax credit under IRC §901.
Article 13: capital gains on real estate are taxable in the state where property is located.

What we modeled

His 2024 tax picture:

US worldwide income: $520k Stripe wages + $25k French rental = $545k.
French-source income for French filing: €24,000 rental, taxed at French rental schedule (approximately 17% plus 17.2% social charges on net rental income = 34.2% effective).
French tax paid: €8,200.

US return:

Form 2555 not used (he does not qualify for FEIE; he is in the US).
Foreign tax credit on French rental tax: $8,850 (converted at the average exchange rate per Rev. Proc. 2020-39).
US tax before FTC: $165,000 federal.
US tax after FTC: $156,150.

Without the FTC, he would have been double-taxed on the €24k rental. With it, he pays the higher of the two countries’ rates, effectively France’s 34.2% rate on the rental income.

The PFIC problem: his PEA held three French-registered UCITS mutual funds. Under IRC §1297, foreign mutual funds are almost always PFICs. Without a Qualified Electing Fund (QEF) election, PFIC gains are taxed at the highest ordinary rate plus interest charges on “excess distributions.” His CPA in France had never heard of PFIC rules. His US CPA flagged the issue.

Options on the PEA:

Liquidate PEA, reinvest in US-domiciled ETFs. Generates current-year French gain (potentially breaking the PEA’s 5-year tax benefit), but eliminates PFIC reporting.
Keep PEA, file Form 8621 each year, elect Mark-to-Market (§1296) if the fund is publicly traded.
Keep PEA, do not elect, accept §1291 punitive treatment on eventual sale.

He chose option 1. He liquidated the PEA, paid a modest French capital gains tax (the PEA protection applies if the account is closed before 5 years in a specific way), and moved the cash to a US brokerage account holding VTI. This simplified his US reporting going forward.

What he did

For his ongoing US return:

Filed Form 1040 reporting $545k of worldwide income.
Filed Form 8938 and FBAR for his French bank accounts and old PEA (before liquidation).
Filed Schedule E for Paris rental, claiming depreciation on the apartment (yes, US depreciation rules apply on foreign real estate, 40-year straight-line under §168(g)(1)(A), or 27.5-year if residential rented at least half the time).
Claimed foreign tax credit on Form 1116 for French tax paid on rental.

For his French return:

Filed non-resident declaration (2042) reporting French-source rental income only.
Paid French tax at rental schedule.
Did not file French returns on his Stripe wages (US-source per treaty).

For his Stripe equity:

ISO exercises: no French tax implication (ISO is US-source).
Double-trigger RSU vest will happen at Stripe IPO. US tax applies on full amount. France treaty would apply only if he had worked in France during the grant-to-vest period. He had not.

What he wishes he had done differently

He did not file Form 8854 when he moved permanently to the US in 2016. Form 8854 is the Initial and Annual Expatriation Statement for individuals who move from the US to abroad, not the other way around, so this was not a relevant form for him. What he did miss: he did not file Form W-8BEN with his French bank and brokerage in 2017 to assert US treaty residency for foreign interest and dividend withholding purposes. His French brokerage had been withholding French default rates on dividends, which he could have reduced to treaty rates.

He also missed the PFIC issue for 6 years. His US CPA from 2016 through 2022 was a generalist who did not flag the PEA. When he switched to a cross-border specialist in 2023, they caught it and amended 3 years of returns to include Form 8621. The amended returns added modest tax (because the PEA had not distributed much) but avoided future §1291 penalty interest on the accumulated deferral.

Third regret: he inherited the Paris apartment in 2023 but did not immediately obtain a French valuation for US step-up basis purposes. US basis in inherited property equals FMV at date of death under §1014. Without a contemporaneous French appraisal, he would have had to estimate FMV retroactively in 2028 or later if he sold. He now has an appraisal dated 2023, which locks in his US basis at approximately €520,000.

Frequently asked

Do I pay tax on my worldwide income if I am a US citizen living in the US?

Yes. US citizens are subject to US tax on worldwide income regardless of residence.

How does the US-France treaty handle RSU income?

Treaty Article 14 treats employment income as taxable primarily in the state where services are performed. RSU income sourced to US work days is US-primary; France gives credit if France also taxes under its own rules.

What is a PFIC and why does my French PEA trigger it?

A Passive Foreign Investment Company is a foreign corporation where 75%+ of income is passive or 50%+ of assets produce passive income. Most foreign mutual funds qualify, including funds held in a French PEA. The US imposes punitive §1291 treatment on PFIC distributions and gains unless a QEF or Mark-to-Market election is made.

Can I use the Foreign Earned Income Exclusion?

Only if you qualify as a bona fide resident or physical-presence-test resident of a foreign country. Living in the US does not qualify.

What about French social security on my US wages?

Under the US-France Social Security Totalization Agreement, you pay into only one system. For US-based work, you pay FICA in the US and receive credit in France.

Composite scenario drawn from common patterns in our advisor network's casework. Names, companies, and exact numbers are illustrative. Not tax, legal, or investment advice.