Here is a country where income from active trading is always taxed as capital gains

[They]

If you trade then you earned the income from the trading and owe tax on it, not your wife. Why even bother to do the whole marriage to a foreign spouse nonsense, why not just claim your Russian friend Boris did the trading so you're not responsible for the taxes, certainly the IRS has no authority over him? You can certainly lie to the IRS, you don't need to go to the effort of a foreign spouse to do that, and you may even get away with it. That doesn't make it legal and it sure as hell won't help you when the IRS figures out what you're doing. But don't pay any attention to me, go give it a try and let us all know how that works out for you.

If you don't grasp the difference between setting up a foreign corporation and getting married, you clearly haven't been part of a happy marriage, and yes, you've got the emotional maturity of a high schooler regardless of your actual age! Heck, my high schoolers have more emotional maturity than that.

Since you have deputized yourself as the emotional maturity police on my hypothetical example of a US citizen marrying a foreign national for tax purposes, I'll give you a couple of more examples that are a little more realistic so you can be even more judgmental....

*US citizen travels abroad, falls in love, gets married and finds there is a possible tax advantage of wife not adopting resident alien status or citizenship. - Go ahead discuss this with your 17 year old emotionally sophisticated, non- tax paying, sexting is acceptable focus group.

Another example to ponder....

*I trade with POA for a foreign entity (corporate or individual) who purchases a house in Bali that I have no-ownership of but I have the lifetime right to use. I use the house and allow friends and family to use the house. - Please have your high school barometers grade this one? And then see if they are intellectually developed enough to join this example with the example above and keep their black and white judgmental mindset.(http://www.ampclearing.com/pdf/POA.pdf)

Its my experience that most people who get all 'holier than though' on how others find ways to reduce their taxes do not earn enough to take advantage of the opportunities that are out there or are just envious, or both.

 

[Sig]

Since you have deputized yourself as the emotional maturity police on my hypothetical example of a US citizen marrying a foreign national for tax purposes, I'll give you a couple of more examples that are a little more realistic so you can be even more judgmental....

*US citizen travels abroad, falls in love, gets married and finds there is a possible tax advantage of wife not adopting resident alien status or citizenship. - Go ahead discuss this with your 17 year old emotionally sophisticated, non- tax paying, sexting is acceptable focus group.

Another example to ponder....

*I trade with POA for a foreign entity (corporate or individual) who purchases a house in Bali that I have no-ownership of but I have the lifetime right to use. I use the house and allow friends and family to use the house. - Please have your high school barometers grade this one? And then see if they are intellectually developed enough to join this example with the example above and keep their black and white judgmental mindset.(http://www.ampclearing.com/pdf/POA.pdf)

Its my experience that most people who get all 'holier than though' on how others find ways to reduce their taxes do not earn enough to take advantage of the opportunities that are out there or are just envious, or both.

Actually I just finished up the transfer pricing study to file for the foreign subsidiary of my U.S. corporation and filed it's taxes which were due on the 5th (and did my FATCA filing, you did remember that this year didn't your?), so I not only have some passing familiarity with U.S. tax law regarding international entities but it's top of mind (and have been married for 20 years for what that's worth). How about you, what's your "experience" in these matters, Mr. 'holier than though'[sic]?

What experience has led you to the conclusion that lying to the IRS and claiming income you earned was earned by someone else is a legal tax avoidance scheme?

What experience led you to the conclusion that lifetime right to use a house somehow has no fair market value and is thus disregarded by the IRS as a taxable benefit? Who knew, I guess I should just use my corporation buy a house, car, boat, airplane...and give me free lifetime use. Then I only have to pay corporate taxes, completely avoiding the double taxation issue of personal tax on my corporate distributions! If only all of the millions of us who own corporations were as smart as you to develop such a brilliant work-around that would hoodwink the IRS and tie their hands forever!
You do understand that you're displaying a lack of understanding of a fundamental aspect of U.S. tax law, not to mention the unrelated but completely relevant extensive case law around PFICs. You did know what a PFIC was without looking it up, right? You do realize you don't know the first thing about this very complex topic you're pontificating on, right?

It is good to see that you've changed from seeking a spouse for the tax benefit to now just controlling their citizenship for a tax benefit. I mean why wouldn't a spouse in a loving relationship want U.S. citizenship when he/she could maintain that Bahamas citizenship and use it to lower your tax burden! To modify your quote, in my experience those who advocate for using tax benefits to choose or control a spouse are either still in high school or still living in their mother's basement.

I could give FA if you want to lie to the IRS or fail to claim taxable benefits you're receiving from offshore entities. Like I said in my last post, knock yourself out and let us know how it works out for you. Nothing you've suggested is even remotely legal tax avoidance and if you're going to illegally avoid U.S. taxes there are far easier ways than the machinations you're advocating here, but again, knock yourself out.

 

[They]

Actually I just finished up the transfer pricing study to file for the foreign subsidiary of my U.S. corporation and filed it's taxes which were due on the 5th (and did my FATCA filing, you did remember that this year didn't your?), so I not only have some passing familiarity with U.S. tax law regarding international entities but it's top of mind (and have been married for 20 years for what that's worth). How about you, what's your "experience" in these matters, Mr. 'holier than though'[sic]?

This is why ET sucks so often, users can't filter through a post and find the essence of it, determine if it applies to them, and if not, just move on. Instead they prefer to just create a strawman argument of some sort in order to be right. I am glad you have found that you will benefit financially by creating a foreign subsidiary, although it is irrelevant to me. Regarding FATCA filing, I never stated that I have foreign assets in MY name. In fact I have inferred the opposite. BTW, I have been married 22 years, we have lived together in numerous countries including the USA during that time.

What experience has led you to the conclusion that lying to the IRS and claiming income you earned was earned by someone else is a legal tax avoidance scheme?

None, the income I claim I pay taxes on. The income I have earned for others while trading their accounts is not my income, they pay their own taxes on it. This is the essence of what I have been saying.

What experience led you to the conclusion that lifetime right to use a house somehow has no fair market value and is thus disregarded by the IRS as a taxable benefit? Who knew, I guess I should just use my corporation buy a house, car, boat, airplane...and give me free lifetime use.

No, you should use somebody else's corporation But on a serious note I am glad that you are such upstanding citizen, it balances out the degenerates like myself.

Then I only have to pay corporate taxes, completely avoiding the double taxation issue of personal tax on my corporate distributions! If only all of the millions of us who own corporations were as smart as you to develop such a brilliant work-around that would hoodwink the IRS and tie their hands forever!

Nobody is hoodwinking anybody. Perhaps you need a better tax attorney.

You do understand that you're displaying a lack of understanding of a fundamental aspect of U.S. tax law, not to mention the unrelated but completely relevant extensive case law around PFICs. You did know what a PFIC was without looking it up, right? You do realize you don't know the first thing about this very complex topic you're pontificating on, right?

Again you are jumping to conclusions. I never stated that my name is on a foreign entity either directly or in a passive manner. What I had stated was that income earned by a foreign entity under a foreign tax jurisdiction has nothing to do with US tax law. You seem to be missing this point.

It is good to see that you've changed from seeking a spouse for the tax benefit to now just controlling their citizenship for a tax benefit. I mean why wouldn't a spouse in a loving relationship want U.S. citizenship when he/she could maintain that Bahamas citizenship and use it to lower your tax burden! To modify your quote, in my experience those who advocate for using tax benefits to choose or control a spouse are either still in high school or still living in their mother's basement.

See above, I have been married for 22 years. I gave some hypothetical examples that although unorthodox were all legal and you are getting bent out of shape.

I could give FA if you want to lie to the IRS or fail to claim taxable benefits you're receiving from offshore entities. Like I said in my last post, knock yourself out and let us know how it works out for you. Nothing you've suggested is even remotely legal tax avoidance and if you're going to illegally avoid U.S. taxes there are far easier ways than the machinations you're advocating here, but again, knock yourself out.

So let me get this right, If I let you and your family stay at my friend's villa in Bali for two months you are going to declare that to the IRS? Really? I suppose we are all different so knock yourself out being the tax paying Puritan, I'll continue along with my own arrangement.

 

[Sig]

I guess we can add inability to use the quoting feature of ET to your accomplishments!

Listen, clearly you aren't a tax attorney, have never spoken to one about this subject, and you don't have anything but a facile understanding of how the U.S. tax code actually works at it's most basic level, not to mention regarding foreign entities controlled by U.S. entities or persons. Nothing you propose is actually legal under U.S. law, no matter how much you want it to be or think it should be or how many contortions you wrap yourself into to convince yourself that it is. You seem to be confused as to if you're advocating for legal tax avoidance or calling people "Puritans" for not engaging in illegal tax avoidance. As long as we're clear that none of this is legal tax avoidance, go forth and break the law all you want, good luck with it. And good luck with convincing that IRS agent that he's being an unreasonable "Puritan"!

BTW, if you were either my employer or a corporation owned or controlled by me or had any business relationship with me then hell yes I would declare a 2 month stay at your villa in Bali as income! As would literally anyone else with a basic understanding of tax laws who generally attempted to comply with those laws! If you were my retired father-in-law and it was an anniversary present, completely different story and would fall under gift tax rules, but that's not what you're advocating at all. You seriously have no clue about this my friend, and at this point have moved to willful ignorance, which is always a terrible thing for anyone who values intellectual honesty.

 

[ElectricSavant]

What a jerk..

I guess we can add inability to use the quoting feature of ET to your accomplishments!

Listen, clearly you aren't a tax attorney, have never spoken to one about this subject, and you don't have anything but a facile understanding of how the U.S. tax code actually works at it's most basic level, not to mention regarding foreign entities controlled by U.S. entities or persons. Nothing you propose is actually legal under U.S. law, no matter how much you want it to be or think it should be or how many contortions you wrap yourself into to convince yourself that it is. You seem to be confused as to if you're advocating for legal tax avoidance or calling people "Puritans" for not engaging in illegal tax avoidance. As long as we're clear that none of this is legal tax avoidance, go forth and break the law all you want, good luck with it. And good luck with convincing that IRS agent that he's being an unreasonable "Puritan"!

BTW, if you were either my employer or a corporation owned or controlled by me or had any business relationship with me then hell yes I would declare a 2 month stay at your villa in Bali as income! As would literally anyone else with a basic understanding of tax laws who generally attempted to comply with those laws! If you were my retired father-in-law and it was an anniversary present, completely different story and would fall under gift tax rules, but that's not what you're advocating at all. You seriously have no clue about this my friend, and at this point have moved to willful ignorance, which is always a terrible thing for anyone who values intellectual honesty.

 

[Sig]

What a jerk..

I know, that whole ad-hominem "Its my experience that most people who get all 'holier than though' on how others find ways to reduce their taxes do not earn enough to take advantage of the opportunities that are out there or are just envious, or both." was totally unnecessary (and as it turns out also incorrect). And advising illegal tax avoidance schemes is a bit of a jerk move as well.

Oh, you mean me pointing that out? OK, sure. If anything I said was incorrect, just let me know? Sorry but you don't get to come spew a bunch of ignorant and incorrect crap and then double down on it and not expect that someone who actually knows something about the subject isn't going to point out that it's ignorant and incorrect. This isn't a place where you get to create your own reality.

 

[luisHK]

Oki, only Sig here managed to earn a few bucks in their lifetime, obviously those looking for tax avoidance schemes are just hanging out on a beach in the thirld world wearing flip flops envious of Sig's stellar career. Bali is one of the worst places I had the displeasure to visit btw so would avoid the invitation and hats off to Sig if he succeeded as well as he claims on the forum, this is not an easy prowess, no matter one's attitude to tax, nationality and marriage, but there are many ways to skin a cat.
Besides it's funny how Sig thinks any married woman would be so happy to trade their citizenship for an american passport and having to deal with IRS all their life anywhere they live.
I hold a good european passport and my wife could have applied for it years ago yet so far she's preferred to keep her nationality ( which does open different residency and tax set ups). American passports are much worse, European tax authorities at least don't get involved with their citizens once their business and residency is overseas.

 

[They]

I am in Andorra wearing flip flops now, headed to France tomorrow.

 

[luisHK]

That sounds better than Bali !
Just got back to Asia after a summer stint on both side of the Pyrenees, already missing Europe...
Have fun there

 

[Sig]

Oki, only Sig here managed to earn a few bucks in their lifetime, obviously those looking for tax avoidance schemes are just hanging out on a beach in the thirld world wearing flip flops envious of Sig's stellar career. Bali is one of the worst places I had the displeasure to visit btw so would avoid the invitation and hats off to Sig if he succeeded as well as he claims on the forum, this is not an easy prowess, no matter one's attitude to tax, nationality and marriage, but there are many ways to skin a cat.
Besides it's funny how Sig thinks any married woman would be so happy to trade their citizenship for an american passport and having to deal with IRS all their life anywhere they live.
I hold a good european passport and my wife could have applied for it years ago yet so far she's preferred to keep her nationality ( which does open different residency and tax set ups). American passports are much worse, European tax authorities at least don't get involved with their citizens once their business and residency is overseas.

@luisHK,
You know a lot about tax law and trading ex-U.S. and have shared quite a bit on that subject which I've followed with interest. You would be one of the people I'd ask about it if I had a question. You've not tossed out tax avoidance schemes that are flat out illegal to those carrying them out, and if someone pointed out that something you said was inaccurate regarding taxes I've no doubt you'd carefully consider what they said, perhaps research it a bit, and if they were correct you'd say so. If someone posted something about HK taxes which was flat out wrong, I've no doubt you'd point that out, in fact I'd count on you to do so. A direct contrast to @They, who admits he's never so much as held more than $10,000 in an account outside the U.S., and yet throws out naive scheme after naive scheme for offshore setups that are clearly against U.S. tax code.
If anything I've said is incorrect, please I welcome your correction. If not, then why in the world would you, especially given your careful and thoughtful posts on this forum, defend a guy who's posting utter crap like this? It's not many ways to skin a cat false equivalency, under U.S. tax law what @They proposes is flat out illegal tax evasion. To the extent he wants to illegally evade U.S. taxes, good for him, although he'd be far less likely to be caught and prosecuted if he just lied about his basis then doing all the complex games he's schemed so not sure why he'd go to all that effort. And hats off to you and your spouse for marrying for love and not as a tax avoidance scheme!
As an aside, won't your Gibraltar plans require some kind of periodic trips to avoid the visa limits or is she covered under the investor visa for full-time residency? Therein lies the issue with spouses and citizenship, if you're a U.S. citizen and your spouse doesn't intend to get residency so can't live in the U.S. except part-time with annoying reset trips and doesn't ever intend to, and has a good passport, and you don't intend to live in the U.S. you might as well just revoke your citizenship to avoid the worldwide taxation issues and take on their citizenship. Either you find the U.S. passport valuable or not, half and half gets you the bad parts of both worlds right?