If I setup a onshore fund(LP) which trades stock only and some of the limited partners(investors) are foreign citizens, do they have to pay capital gain tax?
I guess the client only needs to pay his home country if his country has tax treaty with US. but I am not a CPA, my opinion does not count anyway.
Quote from bigmonkey:
Guys:
If I setup a onshore fund(LP) which trades stock only and some of the limited partners(investors) are foreign citizens, do they have to pay capital gain tax?
If I setup a onshore fund(LP) which trades stock only and some of the limited partners(investors) are foreign citizens, do they have to pay capital gain tax?
Keep in mind foreign citizens with US residency are still "US persons", and pay the same taxes all US citizens do.
Non-US persons, however, wouldn't even have a social security number or EIN. They certainly would not pay capital gains tax to the United States government. However, I believe your LP still has to report their gains in your annual filings... and this is why many foreign investors prefer off-shore funds, where no one has any reporting responsibilities at all recording their gains.
