Im a U.S. citizen, but im currently a legal resident of kuwait. There are no taxes in kuwait. I have a xpresstrade and ameritrade account under my U.S. address. Can I open a account in another country and not pay taxes legally? Is there any non- U.S. citizens who have accounts in the states? and if you do are you responsible for paying taxes in your country on your gains. (I need a cpa) Any info or links would be appreciated. Thanks in advance. Regards, Nick
A U.S. citizen is subject to worldwide taxation on all of his or her income regardless of where he or she resides and regardless of the account location. This is unlike other jurisdictions like the U.K. and Canada which only tax their citizens if they reside in the country during the year. For a good discussion of U.S. taxation of forex, see www.manchesterfx.com/taxation.htm. Hence, bottom line, as long as you are a U.S. citizen, you will owe full tax on your forex gains (but you can make the 60/40 election outlined in the link to get the lower tax rates). Best, Bob
The link in my last message should be www.manchesterfx.com/taxation.htm without the period at the end. Bob
Nick: As a resident of Kuwait I'd assume you are familar with IRS Publication 54. If not, I'd go to the IRS web site and review it. It covers a lot of what you need to know as a US Citizen working overseas. Jack
sorry to hijack the thread, but what is a reasonable time frame to expect a k1 form from a prop firm? I was told that I would hopefully receive it around 4/15, which i think is ridiculous. Also, what happens to your initial deposit if you decide to leave the firm? How do you make sure it is categorized correctly not representing a profit distribution? Thanks!
I did some research on this on found something to my complete amazement. According to the instructions for form 1065 (the partnership return of which k-1 is a schedule) requires the partnership to file the return no later than 4 months and 15 days after the end of it's fiscal year. The k-1's, according to that same instruction document (i1065) requires k-1's to be distributed to partners by that time. This is all per the IRS's own publications. Thus, incredibly, the partnership is not obliged to give you a k-1 until April 15, assuming it's fiscal year ends 12/31. Check out pages 3 and 22 of the 2005 instructions to from 1065.