Foreign Stock Ownership and Taxes
There have been more questions lately about foreign stock ownership and taxes. Here's an example. A U.S. citizen sends $10,000 to a brokerage firm in Canada for investing in Junior mining stocks. But he asks himself this question: What kind of corporation should I form in order to minimize capital gains taxes from stocks and to protect my privacy as well?
Once of the first things U.S. investors in foreign securities should consider is both U.S. tax treatment and the tax laws of the foreign country (if they have any).
Canada imposes a tax on capital gains realized by foreign investors. The U.S. tax treatment of foreign company stocks is basically the same as for U.S. stocks, and that is if the stocks are held directly by the taxpayer or through a ‘pass-through’ entity. (Pass-through entities, by the way, include a partnership, S corporation or a U.S. grantor trust.)
So, if a tax is imposed by Canada, the U.S. allows the taxpayer to claim a foreign tax credit to the extent of the U.S. tax on the income subject to tax in Canada.
However, if a U.S. taxpayer forms a foreign corporation, and uses that corporation to invest in securities, the U.S. will treat that entity as a passive foreign investment company (PFIC) and as a controlled foreign corporation (CFC). Generally, U.S. tax treatment of these entities is not beneficial.
In some cases, a foreign corporation or international business company (IBC) that is owned by a U.S. citizen can elect to be treated as a pass-through entity. This election can be made with tax form 8832. If the foreign corporation is owned entirely by one U.S. citizen or entity, then it can elect to be treated as a disregarded entity. Income of disregarded entities would then be reported on form 1040 of an individual or on form 1120 for a corporation.
OFFSHORE ASSET PROTECTION
- Asset Protection Tax Summaries Italy
- Offshore Cayman Islands
- Asset Protection Tax Summaries Ecuador
- Asset Protection Nsa Spying
- Asset Protection Tax Summaries France
- Offshore Pensions And Taxes
- IRS Abusive Trusts
- Panama Region
- Tax Avoidance Vehicles
- Asset Protection Tax Summaries Honduras
- Asset Protection Guernsey Taxes
- Asset Protection Panama Foundations
- Asset Protection Identity Theft
- Offshore And Alternative Investments
- Offhshore Banking Privacy
- Asset Protection Privacy
- Irrevocable Life Insurance Trust
- Bahamas Information
- Asset Protection Expatriation
- Asset Protection Tax Summaries Panama1
- Asset Protection Taxing Expats
- ASSET PROTECTION TAXING FOREIGN STOCK
- Asset Protection Flat Tax For Puerto Rico
- Asset Protection Location Of Your Company
- Asset Protection Caribbean Tax Havens
- Asset Protection Renunciation
- Asset Protection Offshore Definition
- Asset Protection Panama
- Family Limited Partnerships Tax
- Boats Asset Protection
- Asset Protection Tax Summaries Ireland
- Taxation Foreign Corporations
- Asset Protection Tax Summaries Mexico
- Asset Protection Offshore Liechtenstein
- Private Annuity Ruling Irs
- Asset Protection Hong Kong
- Assetprotection Trusts
- Asset Protection Faq
- Intentionally Defective Grantor Trust
- Panama Canal Zone
- Asset Protection Laundering
- Going Offshore
- Offshore Asset Protection
- Dynasty Trust The Basics
- Offshore Asset Protection Planning
- Secret Bank Accounts
- Asset Protection Police
- Asset Protection Guernsey
- Asset Protection Second Passport
- Asset Protection Tax Summaries Nicaragua
- Asset Protection Scam Trusts
- Nevis Offshore Financial Center
- Asset Protection Using Offshore Trusts
- Probate And Revocable Trusts
- Asset Protection Lawsuit Prevention
- Poetic Injustice In The Pearl River Delta
- Offshore Financial Centers Ireland
- Panama Comfort Zone
- Isle Of Man No Tax Zone
- TrustMakers Forms Center
- TrustMakers Site Map
Learn more about protecting your assets with these articles:
If you are looking for the most important concepts in Asset Protection, this is where to start! If you need to talk intelligently about protecting your net worth or you are a professional this online training program is for you!
Get our Free Online Asset Protection Video Course.
Learn how to protect yourself like the pros!
Clear, concise and straight forward, this e-Book will help you make sound decisions with your business and personal assets..
This e-course will give you straight forward asset protection advice you can implement now. One of the best asset protection courses available! Includes 70+ video lessons, 3 Ebooks, and 6 example legal documents!
The key to a solid Asset Protection Plan is the Estate Plan. This downloadable estate organizer will help you keep track of important information about your assets and important legal documents all in one place.