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Taxes: Can a Trader Relocate to tax-free locale?
- Thread starter Sean McLaughlin
- Start date
If you live there, pass an IRS means test, and start a business that employs a minimum of 6 local citizens, you are entitled to a 90% reduction of your US Federal tax liability. If you simply live there, zero benefit.Quote from puretruth:
I believe you have reduced taxes in the US Virgin Islands
A VISA card from an off-shore bank...
Quote from Trader KGB:
Yes corporations are able to source income to low/no-tax foreign subsidiaries (Goldman's 1% tax rate speaks well enough of the subject, and oddly, the press is silent). However, this income is taxed if repatriated. Now corporations don't often need to repatriate earnings, but individuals might like to, unless you plan to never need or spend your off-shore gains.
Basically, if you're a trader with mostly liquid assets, you can apply for citizenship in St Kitts or Dominica for ~$250k today, renounce, apply for a US visa, then go back to living & trading in the US, tax-free. Nice little loophole there.
imo-not going to work,if you trade US market from your personal accounts(might work for your corporation offshore)
http://www.irs.gov/taxtopics/tc851.html
http://www.irs.gov/businesses/small/international/article/0,,id=96493,00.html
You are considered a resident alien if you met one of two tests for the calendar year.
The first test is the "green card test." If at any time during the calendar year you were a lawful permanent resident of the United States according to the immigration laws, and this status has not been rescinded or administratively or judicially determined to have been abandoned, you are considered to have met the green card test.
To meet the substantial presence test, you must have been physically present in the United States on at least 31 days during the current year, and 183 days during the 3 year period that includes the current year and the 2 years immediately before. To satisfy the 183 days requirement, count all of the days you were present in the current year, and oneâthird of the days you were present in the first year before the current year, and oneâsixth of the days you were present in the second year before the current year.
but wait...there is more for green card holders:
You are a U.S. resident for tax purposes beginning on the first day you are present in the U.S. as a lawful permanent resident. As a resident taxpayer you must report, for U.S. tax purposes, your worldwide income.
http://www.thetaxguy.com/residency.htm
for an american citizen it does not matter where in the world you live if you earn money you have to pay U.S.taxes if you have an account with more than 10k in it you have to file an FBAR,failure to do so is a felony offense. if you renouce U.S. citizenship, very difficult to do them can audit up to 10 years after you do it. those are the facts if you do anything else but report your income they make you into a felon.spain,vietnam,cambodia and other nations did not return you for tax evasion.good luck
Quote from Bob111:
but you have to realize that you are about to became an outlaw.
can you live with it? regardless to what you about to do. incorporate offshore anonymously,trade on this corporation behalf..whatever....are you aware of tax consequences? ready for spy type sort of living? how about your family members? i'm not US citizen and can move to a panama for example with no problem..cheap place,no taxes on trading..but what about the family? your kids(if you have any). i ask myself the same question many times..imo-not really worth it. you have to either sacrifice everything or just forget about it,if you like a good sleep at home.just remember-once you in-there is no middle.
I should point out that I'm looking for an income tax-free living without breaking any laws. I realize there are many ways to skirt taxes - but then you're left looking over your shoulder at every turn. This is not what I'm looking for.
I want to know if it is possible - in this world - to be a law abiding citizen that doesn't have to line the pockets of its government.
As long as you can still be classified as a nonresident alien, the IRS says you're in the clear:Quote from Bob111:
imo-not going to work,if you trade US market from your personal accounts(might work for your corporation offshore)
http://www.irs.gov/taxtopics/tc851.html
http://www.irs.gov/businesses/small/international/article/0,,id=96493,00.html
"Even if you meet the substantial presence test, you can be treated as a nonresident alien if you are present in the United States for fewer than 183 days during the current calendar year, you maintain a tax home in a foreign country during the year, and you have a closer connection to that country than to the United States."
I guess it comes down to how they define "closer connection". Could it be as simple as owning off-shore and renting on-shore? An off-shore business? Guess that's one for the lawyers.. I merely throw this out there for the fun of discussion. I don't think anyone seriously considering renouncing would attempt to stay in the US thereafter (though it appears possible to do for part of the year with careful planning).