A reader asked about this when he sent this question:
Hi Gary, With the depressing and seemingly endless deterioration of the U.S. financial condition, my interest in offshore investing is growing rapidly. Given your many positive references to Jyske Bank, I finally decided to contact Thomas Fischer to begin the process of evaluating specific multi-currency investments. Apparently, Thomas was on a business trip, but Peter Vestbirk Laub was kind enough to respond to my email.
I had a question about the U.S. tax impact of a typical multi-currency investment with Jyske. However, Peter recommended that I consult with a local tax expert. Unfortunately, I have not yet located a tax person with expertise in this area.
Gary, you answered part of my question in your “Multi Currency Tax” article which said “stocks and bonds purchased abroad are treated under US tax law in the same way as stocks and bonds in the US for tax purposes.”
However, I was under the impression that foreign investments are burdened with additional U.S. tax filing requirements. I’m trying to determine the scope of this extra overhead. I also want to know if there are annual U.S. taxes that need to be paid on a multi-currency investment or do you pay your taxes when the investment is sold or closed out. If you’re willing to share your personal experience on this matter, that would be great. Otherwise, can you point me to other resources that might be of help? Regards,
This is a good question.
First I want to mentioned that Thomas Fischer is speaking at our upcoming October 3 to 5 International Investing and Business Course.
course in North Carolina.
To help you meet him and learn direct how Jyske can help, we will give you a $249 subscription to our Borrow Low Deposit high course free,
The course fee is $749 for one, or $999 for two. You receive a one year subscription to our multi currency course free. You save $249. See more below.
Now back to tax. Essentially investments held abroad are tax neutral, other than mutual funds. Non US mutual funds have the potential of being considered PFICs. You can read more about PFICS at PFIC Mutual Fund Regulations.
This article also has the email address of a good attorney who specializes in overseas structures, Leslie Share. His email address is email@example.com
The tax attorney I use (and have for decades) is Joe Cox at firstname.lastname@example.org
Other than this, investing abroad is almost all tax neutral.
There is one reporting requirement on overseas investments that has nothing to do with tax. If the total of your bank accounts and investments held abroad are $10,000 or more (total amount of all account), US citizens and residents tax payers are required to submit a form TDF 90-22.1 to the Treasury department. This is not a tax or IRS form and you should not send it to the IRS. This is a Treasury department form.
However you can read about the TDF 90-22.1 at the IRS’s website.
Join me with Thomas Fischer of Jyske Bank, Merri and me, Friday to Sunday, October 3-5 to learn more about International investing and business. We selected this weekend as the most likely to be beautiful with the autumnal leaf change. The colors are glorious.
Here delegates at a previous course chat during a coffee break.
The October course is traditionally our smallest so we time to take questions from everyone. Save $249. You receive a one year subscription to our online multi currency course when you enroll.
Join us at our Farm in the Blue Ridge. Here are delegates at a previous course with Thomas Fischer and me at our seminar hall on the farm.
Peter Vestbirk Laub of Jyske Bank will speak at our November 7-9 International Business Made EZ course.
Here are delegates enjoying Ecuador’s winter sun in our open air courtyard during a course coffee break.
When you join us in Ecuador, our staff meets all course delegates (who arrive the day before the course or tour) at the airport to help them get to their first night accommodations (usually in Quito). We recommend Hotel Quito which we have used ourselves for years. We send this hotel a lot of business and because we do not take any travel agent commissions we can normally get about a 50% reduction for you on the room rate ($50 to $60).
Then we take delegates in a group to the course destination or start the tour from Hotel Quito next day.
The original meeting and all group transportation is included in the course or tour fee.
Individual meetings, individual travel and accommodations are not included in the price of our courses and tours.
For our Andean courses and tours most delegates stay at our colonial Inn El Meson de las Flores which is $59 a night plus 22% service and tax per room. This includes a full served breakfast.
There are also hotels nearby that cost more such as the Relais & Chateaux rated La Mirage Spa.
This spa normally charges $390 a night but we can usually get delegates about a greatly reduced rate.
All hotels by law add the 22% service and tax.
There are also nearby Cotacachi hotels that charge in the $25 a night range.