W-8 changes 15.05.06 - important

[local_crusher]

Unfortunately, this seems to develop into a complex matter:

I thought I had "upgraded" my W-8 correctly but now I found out it didn't work for some reason. I must have missed a point or two. It appears my W8 is still invalid.


IB will probably add detailed instructions within the next days that I will read and start over, but I say that it is probably extremely important that IB tries to warn clients with invalid W8's or even lock these accounts on May15.


Imagine a trader trying to catch the opening in a stock on May15 with his full buying power, then closing out the position and his account is gone for good.

Also, I think it is close to impossible for a non-US citizen to gather this money back from the Federal Reserve. You cannot even file an individual's tax return without a U.S. TIN/SSN, I'd say.

Of course, none of these are IB's fault since they are only enforcing appropriate regulations.

 

[Chagi]

This whole issue seems a bit whacky to me, I haven't seen any news regarding this on other Canadian brokerage websites (yet). Could this have to do with IB clearing in the US vs. Canadian brokerages clearing within Canada?

I just find it odd that other Canadian brokers don't seem to be posting news items about this if such a significant change is happening if clients were not to have this form on file.

P.S. This isn't an anti-IB post, I'm just genuinely curious to see if this form is required for other Canadian brokerages.

 

[juliogonz]

This example is correct ?????

If it is correct, this is called to steal ...

Quote from IBj:


Case:
buy 100 IBM @ 90 at 12:00 in USD
sell 100 IBM @ 90 at 12:00 in USD
The sell trade will be withheld on $3000 (30%*90*100shares) even though there is no profit, and no tax liability. But since nobody can live with 30% on proceeds (as opposed to profits) everyone will file their W8/W9.

 

[crazy_trader]

I did a comparison on a 2000 W-8BEN vs a 2006 Revised W-8BEN. Part IV Line 3 has some minor changes. Not sure why that require everyone to update it.

 

[local_crusher]

crazy,

I didn't see the old forms (rev 2000).
It would be a benefit for all those affected if you could list the changes you noticed.

A possibility that just came to my mind is:

a) not to trade on May15
b) on May16: Do this: BUY 1 STK LU MKT; SELL 1 STK LU MKT
c) wait for May16 statement and see if there is a withholding on the sale proceeds

 

[crazy_trader]

I just did a search on google.com and found this


http://www.bankaudiusa.com/report/W8BEN.PDF

and compare it to the latest from IRS website.

 

[giggollo]

Does everyone have to mail in a hardcopy version of the updated W8-BEN in addition to submitting it online on IB's website to be in good standing? My experience has been that when i come to withdraw money, i am told AT THAT POINT by the broker that i have to mail in a hardcopy of the W8-BEN in order for me to be able to withdraw money, and this is not just with IB but with other brokers (it's industry-wide)..ie electronic submission like fax, or scanned email is not sufficient...would be nice to know in advance if it's also necessary to mail in a hardcopy...thank you

 

[juliogonz]

What ????

Is legal ?

Quote from giggollo:

Does everyone have to mail in a hardcopy version of the updated W8-BEN in addition to submitting it online on IB's website to be in good standing? My experience has been that when i come to withdraw money, i am told AT THAT POINT by the broker that i have to mail in a hardcopy of the W8-BEN in order for me to be able to withdraw money, and this is not just with IB but with other brokers (it's industry-wide)..ie electronic submission like fax, or scanned email is not sufficient...would be nice to know in advance if it's also necessary to mail in a hardcopy...thank you

 

[zdreg]

Quote from giggollo:

Does everyone have to mail in a hardcopy version of the updated W8-BEN in addition to submitting it online on IB's website to be in good standing? My experience has been that when i come to withdraw money, i am told AT THAT POINT by the broker that i have to mail in a hardcopy of the W8-BEN in order for me to be able to withdraw money, and this is not just with IB but with other brokers (it's industry-wide)..ie electronic submission like fax, or scanned email is not sufficient...would be nice to know in advance if it's also necessary to mail in a hardcopy...thank you

the answer is no at IB or other places where an electronic signature exists.

(fax and scanned e-mail is not an electronic signature.)

 

[HGTrader]

Quote from IBj:
Case:
buy 100 IBM @ 90 at 12:00 in USD
sell 100 IBM @ 90 at 12:00 in USD
The sell trade will be withheld on $3000 (30%*90*100shares) even though there is no profit, and no tax liability.

SO, someone with $20,000 or whatever in their account, trades the YM thinking to make a quick $50 profit, ends up seeing $17,380 or more dissapear from their account?!?