For those from US...just dont do this crazy idea! I have brazilian and european passport, i would love to pay tax in US (I actually do 150k+ )...I've been all continents and, for me ,USA is by far the best country...(i've travelled the east and west coast). Trust me, your grass is greener! Like everything in life: You wanna play, you gotta pay!
Read our page International Tax Matters. http://www.greentradertax.com/trader-tax-center/international-tax-matters/. Excerpts: U.S. residents living abroad U.S. tax residents are liable for federal tax on worldwide income whether they live in the U.S. or a foreign country. The U.S. is not accommodating like some foreign countries which exempt their residents abroad on income sourced outside the home country. The U.S. does give some tax equalization benefits to its residents abroad like the Section 911 exclusion on foreign earned income and a housing allowance, both reported on Form 2555..... Renouncing U.S. citizenship or surrendering a green card Trading is virtual and many American traders can easily move almost anywhere in the world, providing they have good access to the markets they trade. Some countries have much lower tax rates than the U.S. and a few countries exempt capital gains from tax. But few traders have surrendered their U.S. resident status (citizenship or green card) which requires potentially paying a Section 877A expatriation tax. The expatriation tax ........ U.S. possessions Puerto Rico (PR) is a one of the most popular U.S. possessions and it enacted new tax incentive acts that are tailor-made for traders/investors, investment managers and financial institutions. Enacted in 2012, PR Act 22 allows investors and traders with bona fide residence in Puerto Rico to exclude 100% of all short-term and long-term capital gains from the sale of personal property accrued after moving there.....
Robert what about if you have lived abroad ten years or more, don't you then get expat status and no longer bound by the tax code?
If you hold onto your legal residency - U.S. citizenship or green card - during those 10 years as a U.S. resident abroad, you probably face the regular expatriation tax rules (Section 877A). I just looked at those rules and clicked Find "10 years" and only see this exception. (g)Definitions and special rules relating to expatriation - Exceptions (II)the individual has been a resident of the United States (as so defined) for not more than 10 taxable years before the date of relinquishment. Would have to look closer to find an exception that you mention, but it doesn't sound right to me.
Robert, am I correct that the PR tax regime is essentially a replacement of Federal Taxation and that the 100% exclusion of capital gains income allows you to run tax free on that income?
It's only money, the issue with going to a lower tax country is, they are more likely to suck have poor health care ( not an issue if your American I guess ) and other issues, no point having money then going somewhere you can't spend it.
I trade for a firm so my winnings are earned income. I did however move from Virginia to Texas so I could save on state income taxes. Real estate taxes here are some of the most expensive in the country, but luckily I rent. If I earning an income that was solely capital gains, I would just trade futures than move to some shitty tax haven country..
Basically correct, but technically it's a bit different. PR taxes PR-source income and the U.S. taxes non-PR source income - the two systems work side by side under Section 933. If you become a bona-fide resident of PR, all trading capital gains afterwards are PR-source income. PR tax incentive Act 22 has a 100% exemption on PR-source capital gains. Presto, move to PR and pay zero tax on capital gains. Learn more on our blog at http://www.greentradertax.com/puerto-ricos-tax-haven-status-is-made-for-traders/ and related Webinar.
To be able to stay within the confines of the US and trade tax free is, as you say, a trader’s tax nirvana. Lifestyle considerations are another matter but that is a matter of personal preference.
This is a long thread so maybe this has already been mentioned. The key to wealth accumulation is the tax free compounding of capital over time. As such, any valid trader or investor would have an IRA account and place as many trades as possible in such account. What seems to be lost here is trading for a living is not all about making enough money to pay the bills. More than anything it is about accumulating a nest egg to enjoy a rewarding and worry free retirement.