Trading From a Tax Haven
- Thread starter trader#21
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If you are a US citizen you must report your income no matter where you made it, unless you live abroad and qualify for an exemption (I believe the income has to be less than $86,000 and you can only set foot in the USA for no more than 10 days). That's after you've paid the local taxes. It's called double taxation and frankly, it is unfair and sucks. The US is one of the few countries that engages in this.
If a brokerage you are using has business in the USA or it is domiciled in a country that has tax treaties with the US, it will most likely report your tax info to the IRS.
If you go to some tax haven, you are taking chances because lately there's been a lot of crackdowns on tax havens both by the US and the EU countries that are tax revenue starved these days. Once there's an information sharing agreement, you are screwed.
If a brokerage you are using has business in the USA or it is domiciled in a country that has tax treaties with the US, it will most likely report your tax info to the IRS.
If you go to some tax haven, you are taking chances because lately there's been a lot of crackdowns on tax havens both by the US and the EU countries that are tax revenue starved these days. Once there's an information sharing agreement, you are screwed.
from what I understand. Offshore "funds" do not pay taxes even if they are owned by americans.
so, set up a offshore "hedge fund"....do all of your trading out of the hedge fund. Now at the beginning of the year use your american entity to buy shares of your offshore Fund, at the end of the year...cash out your shares of the fund, and pay long term Capital gains on your shares of the fund.
could also leave some of your money/shares off shore and never bring those back into the country....similar to what Apple does and I don't think you are liable for taxes on money earned out of the country until you bring it back into the US. Downside to that, is that you would have to plan on living out of the US in the future, and maybe even plan on renouncing the US passport to get those funds tax free.
so, set up a offshore "hedge fund"....do all of your trading out of the hedge fund. Now at the beginning of the year use your american entity to buy shares of your offshore Fund, at the end of the year...cash out your shares of the fund, and pay long term Capital gains on your shares of the fund.
could also leave some of your money/shares off shore and never bring those back into the country....similar to what Apple does and I don't think you are liable for taxes on money earned out of the country until you bring it back into the US. Downside to that, is that you would have to plan on living out of the US in the future, and maybe even plan on renouncing the US passport to get those funds tax free.