I heard from a trader at an Expo last year, that the a Saxo Bank forex salesman in their booth told the trader that he does not have to pay taxes in the US on his Saxo Bank forex trading gains (in Europe) until he repatriates the funds back to the US.
That is completely false and has troubled me since I heard it. US residents are taxed on worldwide income, as made, not as paid out or repatriated.
I mentioned this hearsay on Podcasts in the past, but I did not name the bank. Now, after seeing this thread, I feel compelled to name names. Again, it's hearsay, but it sounds reliable and I heard it from more than one person.
Maybe it was inadvertent bad tax advice, but it could also be a sign of bad business practices. What is true is that if you buy Euros in Europe and hold them, you don't have realized ordinary income until you convert back to dollars. Forex trading is different.
On our podcast yesterday, on our site, I discussed foreign versus US forex brokers on a number of levels, covering: is your money safe, tax, reporting foreign bank accounts, regulatory, leverage and more.
