Paying tax only at the end of a long-term investment

[Quanto]

Let's say you want to invest $1M into something for 10 years.
Only at the end will you withdraw your investment incl. the profit or loss.
Which ways do exist to do this w/o needing to pay any taxes in the intermediary years?
Only at the end shall tax be due.
With which business model or partnership or company structure etc. is this possible to do in the US (or other countries)?

 

[2rosy]

If the investment doesn't give you income during those 10 years what tax would be levied ?

 

[Quanto]

If the investment doesn't give you income during those 10 years what tax would be levied ?

The investment might annually generate unrealized profits (ie. book value), but such an implicit compounding (ie. automatic re-investing any profits) is a main feature of this investment model.
Still no tax shall be paid before the 10 years are over.
Is this possible to do?

 

[p0box4]

Let's say you want to invest $1M into something for 10 years.
Only at the end will you withdraw your investment incl. the profit or loss.
Which ways do exist to do this w/o needing to pay any taxes in the intermediary years?
Only at the end shall tax be due.
With which business model or partnership or company structure etc. is this possible to do in the US (or other countries)?

In Belgium you don't pay tax on returns on investment in stocks for example on the condition that you hold it for over a year.

 

[p0box4]

The investment might annually generate unrealized profits (ie. book value).
Still no tax shall be paid before the 10 years are over.
Is this possible to do?

I doubt any country will tax you on unrealised gains, so as long as you don't close the investment and take the profit, you won't be paying taxes.

It's best to contact a local accountant to be sure.

 

[Quanto]

I doubt any country will tax you on unrealised gains, so as long as you don't close the investment and take the profit, you won't be paying taxes.

Can the above said be applied also to a trading account?
Ie. it gets an initial funding, and then you try for 10 years to increase its value by doing say swing trading, ie. making many trades which last only some weeks only. Doing this for the said 10 years.

 

[jys78]

The investment might annually generate unrealized profits (ie. book value), but such an implicit compounding (ie. automatic re-investing any profits) is a main feature of this investment model.
Still no tax shall be paid before the 10 years are over.
Is this possible to do?

Possible? As far as I know this is standard in most if not all jurisdictions. Who makes you pay taxes on unrealized gains?

 

[Quanto]

Possible? As far as I know this is standard in most if not all jurisdictions. Who makes you pay taxes on unrealized gains?

I'm no expert in tax issues, but I think in Germany you have to pay instantly (!) 25% tax (plus 6% or so "church tax"(!) ) for profits from any single roundtrip-trade.

Maybe someone from Germany can tell more on how the taxing there for traders looks like. They have a law called "Abgeltungssteuer", and not even my house bank could tell me how to interpret/apply it in practice, b/c it sounds so unrealistic and "outlandish", IMO

 

[p0box4]

Can the above said be applied also to a trading account?
Ie. it gets an initial funding, and then you try for 10 years to increase its value by doing say swing trading, ie. making many trades which last only some weeks only. Doing this for the said 10 years.

If you realise a profit you will have to pay taxes every year, since it's money you made in that particular calendar year. So by doing what you described above you will have to pay taxes every year on whatever you made that year.

 

[Quanto]

If you realise a profit you will have to pay taxes every year, since it's money you made in that particular calendar year. So by doing what you described above you will have to pay taxes every year on whatever you made that year.

Any other, better alternatives out there?
For example doing it as a company or so?

Btw, how are hedge funds, and similar financial firms, taxed in the US?