MoneyTec 2.0 - Online Forex Traders & Brokers Social Networking Community » Trading Talk » Career Trader

[techinvest]

I'll go ahead and put it out there. I'm a trader in the US and I'm tired of paying tons of taxes for things I'll probably never see (ie Social Security) and would like to reduce my tax burden as much as possible. Living outside of the US is not going to be possible for another 2 years.. buuut, after that it might be. Now, I'm not suggesting moving then, but I may. What I want to know is, does anyone know about structuring and IBC with offshore banking to minimize or eliminate the taxes I pay on my trading gains? Shady or not, I'm interested in hearing all sides. I'll approach a tax attorney at some point, but I was just wondering what people here know as some intelligent people frequent the board. Thanks for all replies.

[WorldSpy]

Try ACM Brokers (2 PIP Spread) or Realtime Forex, both in Geneva, Switzerland.

http://www.ac-markets.com/

http://www.realtimeforex.com/

[gballard]

Once you move overseas you will be eligible for an $80K earned income exemption. If trading is your primary source of income then it chould be considered "earned", but there are wonky rules in the tax code that need to be checked out. As a U.S. citizen you will be taxed on your worldwide income even though you are living overseas. There are ways to tax plan that may work to reduce your future tax bill. Now is the time to begin that planning so your future income could be in a lower tax entity, if that is what you decide to do. The rules that cover this aspect of international living are a minefield so you need to know what you are doing. There are many options available. But each option has its cost. You will need to check with a competent accountant or better yet a CPA/Attorney that is familiar with this part of the tax code. Be careful and don't just take their word that they know what they are talking about, get names of their international or ex-patriot clients to talk with before you spend your money. Very few people have the proper credentials to advise you in this area and the wrong advice will be very costly. Having an account with a foreign broker in the wrong structure won't mean a thing. Don't take the advice of someone overseas that has a vested interest in that advice in this area. Stick your nose in the tax code ad become your own expert because you are responsible for whatever advice you finally take anyway. Set up a business that is properly leveraged with good depreciation and your tax bill can go way down plus with your earned income exemption you will get the best of both worlds.

[Coral Shores]

Originally Posted by techinvest

I'll go ahead and put it out there. I'm a trader in the US and I'm tired of paying tons of taxes for things I'll probably never see (ie Social Security) and would like to reduce my tax burden as much as possible. Living outside of the US is not going to be possible for another 2 years.. buuut, after that it might be. Now, I'm not suggesting moving then, but I may. What I want to know is, does anyone know about structuring and IBC with offshore banking to minimize or eliminate the taxes I pay on my trading gains? Shady or not, I'm interested in hearing all sides. I'll approach a tax attorney at some point, but I was just wondering what people here know as some intelligent people frequent the board. Thanks for all replies.

Techinvest,

Please note that if you are a US citizen and you fill out a tax form incorrectly because of ignorance of the law that is one thing. On the other hand, if there is intent to hide income that is a criminal matter which means jail time.

Since as a US citizen you are liable for taxes on your world wide income what you may be looking for is another entity like a corporation that does trading as it's business offshore.

You really do need the advice of a professional though.

[Dr. Zogg]

Speak to these guys: www.sovereigngroup.com

We are setting up off shore entities, for our trading, that is tax efficient, even for Americans, but it does take money. The right company for your purposes is about $4000 to set up.

The link above will take you to specialists in the area that we deal with.

[techinvest]

Originally Posted by Coral Shores

Techinvest,

Please note that if you are a US citizen and you fill out a tax form incorrectly because of ignorance of the law that is one thing. On the other hand, if there is intent to hide income that is a criminal matter which means jail time.

Since as a US citizen you are liable for taxes on your world wide income what you may be looking for is another entity like a corporation that does trading as it's business offshore.

You really do need the advice of a professional though.

Yes, and IBC is what I mentioned above and does seem the correct route. I'm also considering a dual citezenship which could... emphasis on could... eliminate more taxes.

And I agree, as stated above, I will contact a professional, but in my experience it seems that there are more "in the box" thinkers than those who think outside of the box. Just due to the nature of the Forex, to be successful you have to think outside of the box. I was just wondering what successful traders here did. Then maybe I can throw some ideas at a tax attorney and then have them do the necessary footwork.

[techinvest]

Originally Posted by Dr. Zogg

Speak to these guys: www.sovereigngroup.com

We are setting up off shore entities, for our trading, that is tax efficient, even for Americans, but it does take money. The right company for your purposes is about $4000 to set up.

The link above will take you to specialists in the area that we deal with.

$4K is change if you saw the check I just cut for taxes

I need relief You're not the first person to suggest them. I haven't even checked out the site, but I'd like a face to face meeting with anyone I do business with and it would be nice if I had that option with them. I will check them out.

[techinvest]

Originally Posted by WorldSpy

Try ACM Brokers (2 PIP Spread) or Realtime Forex, both in Geneva, Switzerland.

http://www.ac-markets.com/

http://www.realtimeforex.com/

And what would this allow me to do? Simply hide the fact that I'm making money in the Forex? I'm not being an ass, just curious.

[Coral Shores]

Originally Posted by techinvest

Yes, and IBC is what I mentioned above and does seem the correct route. I'm also considering a dual citezenship which could... emphasis on could... eliminate more taxes.

And I agree, as stated above, I will contact a professional, but in my experience it seems that there are more "in the box" thinkers than those who think outside of the box. Just due to the nature of the Forex, to be successful you have to think outside of the box. I was just wondering what successful traders here did. Then maybe I can throw some ideas at a tax attorney and then have them do the necessary footwork.

In addition to talking to traders maybe look up someone who is involved with a multinational business? Trading is just another business after all.fficeffice" />>>

>>

Ask them how they set up their various affiliate companies around the world and why.>>

[techinvest]

Originally Posted by Coral Shores

In addition to talking to traders maybe look up someone who is involved with a multinational business? Trading is just another business after all.fficeffice" />>>

>>

Ask them how they set up their various affiliate companies around the world and why.>>

Absolutley, and great advice!

[borat52]

I'm going to jump on the bandwagon here.
If you were to set up an IBC elsewhere (outside the USA) that traded as its business and kept all of the profits in the company, and did not pay you an income, then would these profits be taxable under U.S law?
Surely you could then leave the US in a couple of years to reside in a tax free zone and pay it all lump sum as an income. This is speculation.
If an IBC is not a suitable entity then what could be set up to be classed as a trading business offshore?

[barry1312]

You have a number of options to help you achieve what you are looking for, the first which has been mentioned here already is to start an offshore company, as a US citizen your best course of action would be to set up a hybrid company which means that althougth the company is yours you would pay a stipend to a national in that jurisdiction to be the director of the company therefore making you totally annonymous, then you can pay yourself out of the company but keep your earmings under tax thresholds thus keeping the balance of your money tax free.
The downsides to this are that it costs approximately $4,000 to set up as has been mentioned, and the bulk of your cash is in a bank attracting no interest somewhat negating all your hard work to earn it.
The second option is to open an offshore bond, the best place to do that would be either the Isle of Man or the Channel Islands in the UK as they have in place legislation to guarantee the safety of your money. If you set up a bond with a life company they will operate it totally annonymously and not give any information to any government worldwide unless they believe the funds have come from crime or terrorism, you can also keep stocks and shares, unit trusts and mutual funds in the bond and it has the added advantage of helping you avoid capital gains tax and if set up correctly inheritance tax/estate tax at a later date. The other advantages are that there is no initial set up cost normally you pay 1% p.a. but these can be paid in arrears from profits made investing your capital, You can also run a bank account with ATM card alongside the bond for easy access to your capital worldwide.
These bonds unlike offshore banks do not report on transactions to anyone as I've already stated but as a US Citizen you are required by law to report any worldwide earnings and as has been mentioned elsewhere if you do not it is a federal offense with possible jail time, the choice of whether you report or not is entirely your own but no information will be given from the company to your government.
Taking dual citizenship will not help your problem as anybody resident in the US for more than 31 days in the current year is eligible for taxation, US or foreign.
Your best course of action is probably an amalgamation of the two options above and I can arrange both of those for you, if you want any more information contact me on barrypyn@yahoo.co.uk and I can explain further or give you more detailed information on residencies and worldwide taxation.
Just to set your mind at rest I don't charge anything for my assistance with matters

[WorldSpy]

fficeffice" />>I like Barry 1312's advice. However, ACM itself states that by Swiss Banking law they cannot disclose any details about you to anyone under any circumstances under penalty of law. They also state that capital gains are not taxable in lace u3:st="on">ffice:smarttags" />lace w:st="on">Switzerlandlace>lace>. The only exception is if they suspect you of money laundering or terrorist activities in which case they must hand over their evidence to Swiss authorities. As for myself I do not speak with absolute authority on this matter as I do not have any accounts with a Swiss broker as I currently trade with a lace w:st="on">USlace> based company and like Warren Buffett believe in paying my fair share of taxes but no more. As a side thought; even if you did trade in lace w:st="on">Switzerlandlace> and paid your fair share of global taxes, a benefit is that no one could argue with your declarations and they would have no proof otherwise. If you felt a certain expense or deduction was just and you took it, no one would be the wiser as you are totally on an honor system with nobody looking over your shoulder. You could almost say, “I made X and thus owe you Y” and be done with it.>>

>

[ezekiel]

This is just a sidebar but, I viewed this show awhile back and thought I would post it here as it touches on the topic. It is run by PBS Frontline called

Tax me if you can - http://www.pbs.org/wgbh/pages/frontline/shows/tax/

Interesting look at what has taken place in the world of international tax shelters and what the IRS has done. Sad but even a notable firm such as KPMG was caught in the act.

Ultimately, the responsiblity rests on your shoulders so do your own DUE DILIGENCE...

I find this an interesting topic

Ezekiel

[techinvest]

Originally Posted by WorldSpy

fficeffice" />>I like Barry 1312's advice. However, ACM itself states that by Swiss Banking law they cannot disclose any details about you to anyone under any circumstances under penalty of law. They also state that capital gains are not taxable in lace u3:st="on">ffice:smarttags" />lace w:st="on">Switzerlandlace>lace>. The only exception is if they suspect you of money laundering or terrorist activities in which case they must hand over their evidence to Swiss authorities. As for myself I do not speak with absolute authority on this matter as I do not have any accounts with a Swiss broker as I currently trade with a lace w:st="on">USlace> based company and like Warren Buffett believe in paying my fair share of taxes but no more. As a side thought; even if you did trade in lace w:st="on">Switzerlandlace> and paid your fair share of global taxes, a benefit is that no one could argue with your declarations and they would have no proof otherwise. If you felt a certain expense or deduction was just and you took it, no one would be the wiser as you are totally on an honor system with nobody looking over your shoulder. You could almost say, “I made X and thus owe you Y” and be done with it.>>

>

Some crucial parts of this messae are gibberish. Am I the only one who sees the smileys and "Office" all over the place?