I want to buy a couple of rental properties and I was thinking about a way which i could bury some of my personal income in an offshore corporation, and then let it accumulate tax free. So what i want to do is set up a corporation in a country which has zero corporates taxes, then what i was thinking about is giving myself a personal mortgage with money through the corporation, to buy a couple houses. If i was to charge myself some exorbitant interest rate through the corporation could I then write off the interest expense against my income? I doubt this is legal but it was just something i was thinking about the other day, and My degree is in Canada so im not as familiar as id like to be with U.S. tax law.
It must be licensed entety to issue mortgages/financing. Licensed mortgage companies send transcripts to IRS on how much interest you have paid. Paying mortgage to unquilified entety will not give you option to wright off interest. (Just my opinion). Should be treated same as donations. Can you donate money to unregestered/unqualified organization outside of US? - NO.
Theres a man named Carlos who gets his haircut at Senor Pedros. He wears a silk shirt open to the second button and has gold chains hanging around his neck. He smokes Panama Reds and chews tobacco at the same time, bald and pock marked face. Meet heem at 12: oclock midnight at the docks ...he'll take you to the man who knows of these things. Be careful the federales are always watching.
So how hard would it be to get "Registered?" Im sure that these corporations who offshore must do this kind of thing all the time, to get money offshore.
Carlos sounds like a respectable guy, i just gave him all my personal information, and money, he said he would start the corp. for me.
Each state has different regulations. The biggest obstacles are the initial audit and high net worth requirements. Yearly audits and compliance will cost you more than you will be able to save on your own mortgage interest. In addition you should not be able to pass the audit (unless you lie) since lending money to yourself will constitute "ralated party transaction" wich must be disclosed. You'll need to become a CPA so you could do your own audits (also illigal). There is also cost associated to become a CPA. "However, becoming a direct lender will require that the mortgage broker goes through a scrutinizing audit. Not everyone will be approved after the audit since they may have not documented properly their practices, or predatory lending cases have been discovered." Contact your state of interest Department of Real Estate.
Thx for the help, i appreciate it, it was just an off the cuff idea, and i wanted to figure out whether or not it was even viable before i start consulting lawyers and accountants for a few hundred an hour.