How do you legally terminate US citizenship?

By renouncing your citizenship before a consulate officer (you cannot renounce citizenship inside the U.S.). If you are renouncing because you are a dual national and dont really "consider" yourself an American, you should have no problems. If you are only an American citizen and want to renounce as a form of protest, then there are more difficulties because the embassy will usually want to know that you have permanent residency/citizenship in another country (the U.S. doesnt like to make people "stateless"). Note: if the U.S. suspects that you are renouncing citizenship merely because you want to avoid U.S. worldwide taxation, then although you have renounced your citizenship, the IRS will still tax you as an American citizen based on your income, even if earned completely outside the U.S.