Your very correct. If I were to think about trading offshore, then that's just one of many things to deal with. Pick the right place and do the proper research, anythings possible. I do know that Panama is very modern and has the high speed internet that we all need. Not to mention very low cost of living.
Good point. I think what we are looking for is a sunny place with a friendly tax system & immigration policy AND broadband wide availability.
Most countrys consider you non resident if you are there less than six months and do not maintain a permanent address there.Say you are a UK citizen and a successful trader.You have a brokerage account in the US to trade naz stocks at low fees.You spend less than six months in thailand and then Mexico,with a trip home to visit family and friends at xmas.None of those countrys are going to come after you for taxes.Unfortunately you had to file a W8 declaration with your US broker.Eventually uncle sam checks with your country of residence, declared on the form.When uncle sam discovers they are not getting your taxes,thats when he gives you a very expensive roto rooter job.Anyone,please correct me if I am wrong about this.
Like I said earlier. You can stay in good grace with uncle sam, exclude 1st 76,000 in income, as long as you can prove residence in another Country. It can be done if one has the patience to proceed.
Surely the stability of a country does not matter if your assets are in a brokerage account in the US?
Correct. We're assuming you want to do things the right way and use an account in the U.S. and trade with your legal name. Your other option is to open an IBC offshore, trade offshore, and use an offshore brokerage account. But I havn't been able to find an offshore brokerage that has reasonable commission fees. You wouldn't want to try anything sneaky and still use a U.S. brokerage. Of course if you use the 2nd method you would have to be extremely careful and would risk not being able to re-enter the U.S. if your passport expires. When you renew your passport, the one thing they for sure check is if your in trouble with the tax man. I have to do some more checking on the 76,000 income exclusion. I know you can be a U.S. citizen and must be a resident of an offshore Country, but I'm not to sure if the income must come from a place other then U.S.
I am not a US citizen and could lose residency.However,I know from bitter experience that uncle sam does not give a dam and will take the taxes if no country with a tax treaty is getting them.My CPA told me if an investment is made in the US and remains in the US,then it is taxable in the US.I suspect this is baloney but I dont know how to fight it.I wish I could get more info about your assertion that $75k can be earned tax free.I can find nothing about this on the IRS site,but they wouldnt want us to find anything like this.
I believe, the $76,000 income exemption (when living outside the US) applies to earned income only, not capital gains.
If you earned your living from trading, wouldnt profits from trading be earned income and not capital gains?
Pat's right - the exclusion applies to foreign earned income - specifically income marked as foreign on a W-2 or similar statement. Earnings from trading a US account, regardless of where you are physically domiciled, wouldn't fall under the exclusion. However, you might be able to do something like set up an offshore corp, trade the corp's account, and pay yourself a salary from the corp (and let the corp pay whatever else you can legally get away with) and then take the exclusion against the salary (leaving profits to accrue in the corp's account tax free until you have to take them out as income to yourself - again letting the corp pay for everything it can legally pay for without you're having to claim it as income).