Oops, I didn't think there was a 'penalty' for withdrawing money from an IRA. I thought that you just paid the regular tax rate on the money that you withdraw. I would gladly defer my income tax ( and my spending money) for several years if it meant building my account. Am I wrong? The point of my thought is - in the early stages of your trading career, the tax bite would prevent you from building your account at any decent APR that would allow you to quit the day job. You see, I thought if you could just leave your money in there, and be patient, without paying any income taxes or capital gains taxes or whatever, it would grow more quickly to a point where you didn't care if you were paying taxes or not. Granted, the account would need to be pretty frickin' big, but what's the rush? Nobody ever got rich in a day, give it 5-8 years and you should get there. Example- if you were good - I'm not, YET !! - and you had built your IRA to 500k and could generate 50% a year from that - or 250k- withdraw say, 150k a year, pay your tax, end up with 100k to live on , and build up your account by 100k a year to account for inflation, bad years, etc. Does that work? Granted, not very sophisticated, but as the account amount goes up, and your experience grows you could withdraw more and more and care even less about the tax paid. Maybe I'm missing something here. Steve
There are a lot of schemes that will work quite nicely (for Americans) to avoid taxation. Chances are you will never be caught. Some of these(schemes) have been mentioned, some others have not. The point being that...UNEQUIVOCALLY, ABSOLUTELY, BEYOND DOUBT,CATEGORICALLY.....none will be legal in the eyes the the IRS....unless we as Americans are willing to give up Citizenship and move overseas. And here's the new twist...If you renounce US citizenship and you paid more than $100K in Federal taxes in the previous year the IRS will consider your renouncement a scheme to avoid taxes and you will be reqired by the IRS to pay US taxes on worldwide income for the next 10 yrs (even thou you are no longer a US citizen). So if you"legally" want to avoid taxes, move overseas and make less than $80K (sorry Anjolette Jolie!)
What if you as an U.S. resident own an offshore company (managed and based outside US) and you don't pay yourself dividends? I guess that's perfectly legal... ECI income is taxed by IRS, but: These ECI rules only deal with business income and they recognize "U.S. business activity is trading in stocks, securities, or commodities (including hedging transactions) through a U.S. resident broker or other agent," as being exempt from ECI. http://www.greencompany.com/EducationCenter/GTTRecTraTypNonResident.shtml
I'm not sure what's legal in the US, but the IRA may be able to loan you the money at a rate of interest, which might have certain tax advantages over a straight withdrawal. Runningbear
Yeah, but the rate is absurdly high. I once tried using my IRA account as collateral for a loan for an amount less than all the cash in account. The rate was just silly even though the account would have to be held in cash (no investments at all). The banker told me that it was just a way for people who had no credit to start off developing a positive record. That was 3-4 years ago. Perhaps things have changed.
According to reports from Italy, Ducati Marlboro MotoGP star Loris Capirossi has been presented with a multi-million euro tax bill after inspectors 'disproved his claim that he lived in Monaco'. The ANSA news agency states that Capirossi had avoided paying taxes to the Italian authorities on 8-million euros earned between 1995 and 1998 by claiming that his official residence was in Monaco. However, tax inspectors declared that he had actually continued living in Italy and proved their case with evidence that the 32-year-old former world champion had paid local ownership taxes on a coast side villa in Ravenna and had continued to use five accounts with Italian banks. Capirossi was found to have evaded both income tax and VAT on sponsorship deals during those four-years - with the VAT alone amounting to 1.5-million euros - but the authorities have not yet revealed exactly how much Loris will have to pay in back taxes and fines for late payment.
http://live-in-switzerland.com/e/faq/ How to obtain Swiss citizenship Home > FAQ > General questions > Citizenship Swiss citizenship (that is, having a Swiss passport) can be acquired (1) through birth from Swiss parents, or (2) through a procedure known as naturalization. Children born in Switzerland from non-Swiss parents do not automatically become Swiss. Naturalization Swiss citizenship can be acquired through what is called naturalization. To become naturalized, you need to have resided in Switzerland for at least twelve years, three of which occurred within the five years prior to the request. Time spent in Switzerland between the ages of 10 and 20 years counts double. The request is to be made to the Aliens Police in the municipality of residence. From there, it will then be sent to the Federal Department of Justice and Police, who will give a principle authorization if the following conditions are met: You are integrated in the Swiss community. You are accustomed to Swiss way of life and practices. You comply with the Swiss legal system. You in no way compromise the internal or external security of Switzerland. Since Switzerland is a federal country, authorization must then be obtained from the canton and the municipality. The canton and municipality of residence can add further conditions and set the cost of acquiring citizenship before approving it. Conditions vary greatly from one region to the next. Some municipalities apply rather open policies, while others will go as far as granting nationality by means of a local population vote. Cost also varies according to municipality and canton. http://live-in-switzerland.com/e/faq/swiss-resident.html What do you mean exactly by Swiss resident? Home > FAQ > General questions > Swiss resident A Swiss resident is somebody whose legal residence is Switzerland. This is a Swiss legal notion that means that an individual has his center of life in Switzerland. One of the consequences is that he becomes a Swiss taxpayer. You cannot be a Swiss resident by just registering, like you would for example subscribe to a golf club but never go. This means that if you are granted a Swiss residence permit, you need to actually move to Switzerland and live there for good. If you cannot stay for 180 days a year or more, then you must make sure that you do not spend more time in any other specific country than you spend in Switzerland. That rules out residence permits given for people who spend a month a year in Switzerland. In case of doubt, please contact us to check whether what you want to is compatible with our laws. Please note that Switzerland does not know the British distinction between resident and domiciled. Here in Switzerland, either you live in Switzerland and you are a taxpayer, or you are neither. http://live-in-switzerland.com/e/faq/citizenship.html