Offshore Accounts for beginners

colonial dr · Aug 15, 2012

Quote from Free Thinker:

lol. do you know how many guys like you we have seen come and go on this site over the years?

Maybe you should wonder why they go. because you attack this op (and me) like a 10 year old troll. you post 13000 are you mentally retarded? I think I should go back to high school and go to prom with the other girl. keep spending your life here while others make money and careers. A very kind form, I'll say. I wonder if I'm the only one here who actually has a job on wall st, all of you just dork around from your basement office (or your mothers basement office) like you know how to make money.

720% is not realistic including commission and slippage.

And it's VERY VERY obvious how all of you are bothered by making money -you tell me 720% is "no problem for any investment" -obviously you have NEVER made this much. To this I say, LMFAO LOSER

Bob111 · Aug 15, 2012

Quote from Nym:

I totally agree,
My naif view is that if the company will give dividends to the owner(s) this income will be taxed following the tax regulation where the owner(s) live.

but let' me underline that this is just my naif view ...

it is naive..you own the company and seriously believe that IRS would eat that dividend BS? heh..
not to mention that the tax on dividends can go up a little bit next year..how about from 15 to 43+%

Free Thinker · Aug 15, 2012

Quote from colonial dr:

Maybe you should wonder why they go.

they go because they are a smart(dumb) ass like you and the market humbles them. wait. i know you are special.

buzzie77 · Aug 15, 2012

I don't believe it! been trading Forex for a while no probs.

Bob111 · Aug 15, 2012

Quote from buzzie77:

I don't believe it! been trading Forex for a while no probs.

hey..you can skip the taxes altogether..just don't be surprised by outcome,when IRS catches you

swissie · Aug 19, 2012

Robert, Dodd Frank really does go to far.

I opened a US account with Interactive Brokers. I will likely trade currency futures instead of forex. The nice thing with interactive brokers is that I can trade forex and futures from one account.

ameliyahaynes · Aug 20, 2012

be selective in choosing the offshore trading companies as they trade differently depending upon the countries. their routing trades are different and therefore the rates also vary.

dewton · Sep 8, 2012

If I understand correctly, the CFTC regulations prevent foreign brokers from accepting US clients, but there is no rule against US clients opening up an account with a foreign broker. Therefore if a US resident starts an offshore company to trade with a foreign broker, it would not be considered evasion since there's no CFTC rule against US residents opening up accounts with foreign brokers. Also I don't believe there is a rule against US residents using a controlled foreign corporation to open an account with a foreign broker.

Also, if I'm not mistaken, only the income received by the US resident from his offshore corporation is taxed. Which means, if the offshore corp makes a profit of $100k in a year and the US resident only takes out $1000 in income during that year, the tax is only on $1000 and not the entire $100k profit made by the offshore corp. So the $99k, being untaxed, can be "reinvested" tax-free.

Will someone correct me on these things if I'm wrong?

Robert A. Green · Sep 8, 2012

Quote from dewton:

If I understand correctly, the CFTC regulations prevent foreign brokers from accepting US clients, but there is no rule against US clients opening up an account with a foreign broker. Therefore if a US resident starts an offshore company to trade with a foreign broker, it would not be considered evasion since there's no CFTC rule against US residents opening up accounts with foreign brokers. Also I don't believe there is a rule against US residents using a controlled foreign corporation to open an account with a foreign broker.

Also, if I'm not mistaken, only the income received by the US resident from his offshore corporation is taxed. Which means, if the offshore corp makes a profit of $100k in a year and the US resident only takes out $1000 in income during that year, the tax is only on $1000 and not the entire $100k profit made by the offshore corp. So the $99k, being untaxed, can be "reinvested" tax-free.

Will someone correct me on these things if I'm wrong?

Disagree. The CFTC enforcement attorney said Americans couldn't use offshore dummy corps to evade the CFTC forex trading rules for retail accounts. You are correct that they are more focused on the intermediaries.

Americans can only get some deferral of income offshore if they have real operations outside the US on trade or business income. But, that doesn't work on passive or investment income. Then the offshore entity, if owned by Americans is disregarded and the income is passed-through to the US. The rules are more complex, but that's the gist of it.

comintel · Sep 8, 2012

Quote from dewton:

If I understand correctly, the CFTC regulations prevent foreign brokers from accepting US clients, but there is no rule against US clients opening up an account with a foreign broker. Therefore if a US resident starts an offshore company to trade with a foreign broker, it would not be considered evasion since there's no CFTC rule against US residents opening up accounts with foreign brokers. Also I don't believe there is a rule against US residents using a controlled foreign corporation to open an account with a foreign broker.

Also, if I'm not mistaken, only the income received by the US resident from his offshore corporation is taxed. Which means, if the offshore corp makes a profit of $100k in a year and the US resident only takes out $1000 in income during that year, the tax is only on $1000 and not the entire $100k profit made by the offshore corp. So the $99k, being untaxed, can be "reinvested" tax-free.

Will someone correct me on these things if I'm wrong?

See
http://www.irs.gov/irm/part4/irm_04-061-007.html#d0e10

"The taxation of foreign income earned by U.S. controlled foreign corporation drastically changed with the introduction of Subpart F into the Internal Revenue Code in 1962. Subpart F deals with the U.S. taxation of amounts earned by controlled foreign corporations (CFCs). It provides that certain types of income of CFCs, though undistributed, must be included in the gross income of the U.S. shareholder in the year the income is earned by the CFC."

As Robert Green says, if you had real operations in the foreign country, then that would be a different matter. But for you to try to claim that your post office box abroad or whatever is real operations will not likely stand up on audit, especially since most of the trades will be controlled by you from your home in the U.S.A, and will take place on U.S. exchanges.