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Off shore trading
- Thread starter praetorian2
- Start date
i wonder has a trader set one of these offshore things up and been audited by the irs and won.that is the test.if so please explain the details for the other readers.
line 7 on 1040 asks.did you recieve any other earned income ,such as foreign wages,excess salary deferrals,or other wages not reported on a form w-2?if you answer no they have you there.if you answer yes it takes you to this question.do you need to report any other nonearned income?so you have to answer that question.
schedule b they ask.did you have an interest in a foreign account or recieve a distribution from a foreign trust?that takes you to this question.at any time during 2001 did you have an interest in or a signature or other authority over a financial account in a foreign country?next line it makes you list the country.
line 6 1040.it asks you if you recieved foreign earned income.then you have to explain it.another trap.this takes you to form 2555 that makes you explain everything.
are you going to lie on these questions?if so you could be in trouble.i am trying to understand how this works just in case i need it some day.
line 7 on 1040 asks.did you recieve any other earned income ,such as foreign wages,excess salary deferrals,or other wages not reported on a form w-2?if you answer no they have you there.if you answer yes it takes you to this question.do you need to report any other nonearned income?so you have to answer that question.
schedule b they ask.did you have an interest in a foreign account or recieve a distribution from a foreign trust?that takes you to this question.at any time during 2001 did you have an interest in or a signature or other authority over a financial account in a foreign country?next line it makes you list the country.
line 6 1040.it asks you if you recieved foreign earned income.then you have to explain it.another trap.this takes you to form 2555 that makes you explain everything.
are you going to lie on these questions?if so you could be in trouble.i am trying to understand how this works just in case i need it some day.
Originally posted by vhehn
i wonder has a trader set one of these offshore things up and been audited by the irs and won.that is the test.if so please explain the details for the other readers.
I doubt it.
What half the conversation is about here is how to do it legally, the benifits and ramifications.
The other half assumes we are talking about a shell, which won't work; and you may or may not get caught.
There are a number of reason to do this; depends on how much money you are making.
I am living offshore now and want to start trading. I also have dual citizenship, US and the country I reside in now. Planning to return to the US sometime in the future but not sure when. Because of this, wanted to know about offshore trading.
Also if I open a LLC in Hong Kong, and open an account with IB, will the IRS look into this? Does the IRS actively hunt and look for people offshore and try to catch them or catch them when they come back to the US?
Also if I open a LLC in Hong Kong, and open an account with IB, will the IRS look into this? Does the IRS actively hunt and look for people offshore and try to catch them or catch them when they come back to the US?
Originally posted by tjymaui
I am living offshore now and want to start trading. I also have dual citizenship, US and the country I reside in now. Planning to return to the US sometime in the future but not sure when. Because of this, wanted to know about offshore trading.
Also if I open a LLC in Hong Kong, and open an account with IB, will the IRS look into this? Does the IRS actively hunt and look for people offshore and try to catch them or catch them when they come back to the US?
The first question is how much money are you making?
This set-up is not illegal in itself; abusing it by being a US person, trading a shell foreign corp is the problem.
At this time, I am making less than the amount allowed by the IRS for persons living overseas. I think the amout was $72,000 several years back but has been raised since then. I don't make near that much I am completely exempt at this time although I am paying taxes to the host country I am in now.
If you structure it as an offshore IBC, and continue to take advantage of the around 80K exlusion, subtract your housing allowance and business expenses you are fine and in compliance.
If you start making more money hire your wife to help you and effectively double the benifit.
What host country are you in that taxes foreign capital gains?
If you start making more money hire your wife to help you and effectively double the benifit.
What host country are you in that taxes foreign capital gains?