Posted by DavidV on December 28, 1999 at 23:02:36:
No lawyer or tax man here either. There are some interesting things on trusts there as far as asset protection. Some countries don’t recognize US judgements (Isle of Man i think is one). Creditors would then have to go to the country where the trust is located and have a trial to determine the validity of the claim. Cook Islands gives a creditor two years statute of limitations after the cause of action. If the trust were kept private there would be lots of hoops for a creditor. I believe most don’t tax trusts as long as the beneficiaries aren’t residents. Personally the ownership entities we have suit me just fine.
Posted by Jon Cummings on December 26, 1999 at 17:36:06:
Hi everyone-
Have any of you investigated buying real estate through some kind of offshore entity? I’m curious about the tax implications and/or benefits to doing so.
I.e., if I form an offshore corporation and buy real estate in the US in the name of the offshore corporation, would I be subject to the same tax treatment as if I bought myself? If so, are there any other possibilities for reducing the massive tax bite? Are there any resources you could point me to regarding this?
Considering the social security disaster looming in the distance… - Posted by Chris (FL)
Posted by Chris (FL) on December 29, 1999 at 10:26:47:
I think this is a topic worth looking into. The S.S. “trust fund” doesn’t have any hard assetts in it - just non-marketable “bonds” which are nothing more than IOUs , to be paid off from raising taxes. It’s a fraud.
The tax ax is going to fall sometime early in the next century ; things are going to get ugly. both the Ds and the Rs are cooking the books because the reality is not a pleasant one to face. This whole “pay as you go” , ponzi-like system cannot cope w/demographic bubbles ( the baby boomer generation coming of retirement age ) or other new developments ( average life spans are/will skyrocket ).
Increased tax rates as well as a Trump type net worth tax are around the corner. The prudent man will prepare.
I’ve just started reading a little on possible solutions. I picked up "The Offshore Money Book " by Arnold Cornez (ISBN # 0-8092-2880-7 ) the other day and allthough I’ve only thumbed through it , it seems comprehensive. … If you come up w/any other books or anything else pertinent to this subject please post it.
In the early 90’s Jay Mitton gave a seminar on offshore investing. At the time he would set up the entities for 30K. His comment was that unless you had more than 100K income to shelter and 300K in assets, it was not worth it. Prices will be higher today.
The technique was to move profits to the first offshore by consulting fees. The trick was to get the use on the money back in the U.S. That was done buy having a second offshore company that did business only offshore. Again by consultation fees, etc. profits were moved to the second company. They in turn would use things like foreign mastercards or bank guarantees to spend the money in the U.S.
For most of us the IRA was the best source to reduce the tax bite. With the Roth IRA it becomes even better. You may no tax but still have to wait. 1031 exchanges work well for properties you already own. Exchange to consolidate your gains then borrow your profits.
Posted by Jim Pasquini on December 27, 1999 at 10:05:28:
I’m no lawyer, I just like to play one on the internet. My understanding of this is you are better off establishing a corporation or LLC in your home state. If you want to try to shelter income or increase your liability protection, you can set up the offshore corporation and then indebt the domestic business entity to the offshore. Perfect the indebtedness by use of a UCC-1, and you could shuttle profits into your offshore business tax free.
It can get very dicey if the IRS decides to go after you as there are pretty strict rules you have to follow. It usually benefits very high worth individuals the best.
Posted by Rob FL on December 27, 1999 at 08:47:18:
I believe federal law requires title agents/lawyers to withhold 10% of your sales price to pay the IRS if you are a foreign national or foreign company. You can get more info at www.findlaw.com or www.alllaw.com.