Legality is offshore for usa citizens

J

john7722

This has been discussed so many times, but the more I read about it the more confusing it gets.

I know that usa taxes on world wide income but does it mean my offshore corporation will be taxed as well each year?

Let say usa citizen opens offshore corporation for trading where are 0 capital gains.
He is the only owner of that corporation .
He doesn't take any salary.
Trading is done from USA.

1.) Would I still have to pay income tax at the end of the year from the corporation to the USA.? (no salery was paid)
2.) If I dont take any money out for 5y and then close the account how much money would I have to pay to the IRS?
3.) Do I have to report to the IRS ownership of such corporation .

I feel like IRS would tax me for each and every year the moment I bring the money back.

Thank you
 
john7722 said:
This has been discussed so many times, but the more I read about it the more confusing it gets.

I know that usa taxes on world wide income but does it mean my offshore corporation will be taxed as well each year?

Let say usa citizen opens offshore corporation for trading where are 0 capital gains.
He is the only owner of that corporation .
He doesn't take any salary.
Trading is done from USA.

1.) Would I still have to pay income tax at the end of the year from the corporation to the USA.? (no salery was paid)
2.) If I dont take any money out for 5y and then close the account how much money would I have to pay to the IRS?
3.) Do I have to report to the IRS ownership of such corporation .

I feel like IRS would tax me for each and every year the moment I bring the money back.

Thank you
More...

Sent you a PM. But I would certainly consult an offshore attorney, in person, in their specific jurisdiction. Yeah, like a couple of nice dinners in some offshore haven...
 
john7722 said:
This has been discussed so many times, but the more I read about it the more confusing it gets.

I know that usa taxes on world wide income but does it mean my offshore corporation will be taxed as well each year?

Let say usa citizen opens offshore corporation for trading where are 0 capital gains.
He is the only owner of that corporation .
He doesn't take any salary.
Trading is done from USA.

1.) Would I still have to pay income tax at the end of the year from the corporation to the USA.? (no salery was paid)
2.) If I dont take any money out for 5y and then close the account how much money would I have to pay to the IRS?
3.) Do I have to report to the IRS ownership of such corporation .

I feel like IRS would tax me for each and every year the moment I bring the money back.

Thank you
More...
Keep in mind you have to file an FBAR and IRS 8938 at a minimum every year, and generally there are transfer pricing issues you need to take care of as well as a bunch of new requirements under the TCJA. You need to plan on spending $10-20k at a minimum to set everything up and potentially that again every year to ensure you're in compliance. Late filing of the 8938 is an automatic $10,000 fine, for example, so even a tiny screw up on your part gets expensive fast. If the monetary advantage of being offshore isn't at least that plus some more to make up for the pain in the ass than it's not even worth looking at.

In fact before asking your questions one has to ask, what are the monetary benefits of being offshore? There are only a few very specific situations where there is any benefit and those generally involve funds with nonprofit LPs or some other very unique cases unless you're running an actual operating company that is conducting business in the host country. If you were in one of those situations where there was a benefit, you probably would already know the answers to the questions you are asking.
 
Last edited:
You must log in or register to reply here.
Back
Top