Quote from sheepsucker:
Whats the hassle?
Lots of companies providing all-inclusive offshore incorporation services.
Establish an offshore trading company and keep most of the profits there until much later..
Income Tax Return Reporting of Foreign Accounts. In addition to the FBAR reporting rules, U.S. Federal tax law requires U.S. taxpayers to properly report on their U.S. Federal income tax returns, and timely pay applicable income taxes on, any interest, dividends, gains or other income earned on their offshore bank and financial accounts, whether or not such foreign accounts are subject to FBAR reporting. In connection with that requirement, and as an adjunct to FBAR reporting, U.S. persons must specifically disclose annually on their U.S. Federal income tax returns, under penalty of perjury, whether they own or have other financial interests in, or have signature or other authority over, any foreign bank and other foreign financial accounts during the tax year in question. The requirement to disclose ownership of foreign financial accounts aggregating over $10,000 on income tax returns applies to individuals (Form 1040, Schedule B), corporations (Form 1120, Schedule N), partnerships (Form 1065, Schedule B) and trusts and estates (Form 1041, Schedule G).
Treasury Regulations under the Federal Bank Secrecy Act require any âU.S. personâ who has a âfinancial interestâ in, or signature or other comparable authority over, one or more âfinancial accountsâ maintained in a foreign country to file an annual report identifying their foreign accounts if the aggregate account value exceeds $10,000 during the calendar year. Those annual reports, commonly referred to as âFBAR Reports,â must be filed with the Department of Treasury on Form TD F 90-22.1 separate and apart from income tax returns. FBAR Reports for a particular calendar year normally are due on June 30th of the succeeding year.
For purposes of the FBAR reporting rules:
â¢A âU.S. personâ is a citizen or resident of the U.S. or a domestic partnership, corporation, LLC, estate or trust.
â¢The term âfinancial accountâ is defined broadly and includes any bank, securities, securities derivatives, or other financial instrument account. Typically, this would include, but is not confined to, offshore savings, deposit or checking accounts at a bank or offshore brokerage accounts.
â¢A U.S. person has a âfinancial interestâ in a foreign âfinancial accountâ if the account is owned by the U.S. person. A U.S. person also has a âfinancial interestâ in any foreign âfinancial accountâ that is owned by: (i) a corporation, partnership, trust or other entity in which the U.S. person has a greater than 50% ownership or beneficial interest; or (ii) a trust established or otherwise controlled by the U.S. person.
â¢Even if a U.S. person does not have a âfinancial interestâ in a foreign âfinancial account,â FBAR reporting is required if the U.S. person has signature or comparable authority over the account and the $10,000 threshold is exceeded.
â¢Foreign financial accounts aggregating over $10,000 at any time during a year are subject to the FBAR annual reporting requirement even if the accounts are owned by tax-exempt U.S. persons or are non-income-producing.
â¢Foreign financial accounts do not include, however, accounts maintained at a U.S. branch or other U.S. office of a foreign financial institution.
