so he has money to invest, now what ....? - Posted by Carol


#1

Posted by Carol on February 25, 1999 at 21:18:12:

Bud, sorry if I misled.
It’s not a question of avoiding taxation, but of avoiding mandatory WITHHOLDING. Non-residents must automatically have a relatively high (details escape me) % of certain kinds of profits WITHHELD. This guy is not trying to avoid taxation, but is participating in the all-american sport of avoiding OVER taxation.

Anyway, thanks for the input.
Carol


#2

so he has money to invest, now what …? - Posted by Carol

Posted by Carol on February 25, 1999 at 18:49:38:

I have a dear friend who has some money (up to 100k) to invest in our ‘ventures’, but he is frothing and writhing over how it should be structured. (I will add that as a non-resident ‘alien’ he doesn’t want to have taxes withheld from profits … though he is tax-paying in this country.)

I suggested that we set up a separate corp and use his money for wholesale flips or our rehabs, and suggested that he check with his CPA.

Any input? I am a dunce at this kind of things.

Suggestions welcomed!
Thanks.
Carol


#3

Treaties - Posted by JHyre in Ohio

Posted by JHyre in Ohio on February 26, 1999 at 17:53:59:

Carol:

Check out the tax treaty between the investor’s country and the US, if any. See if dividends, interest or some other type of income is given more favorable treatment. If so, structure the deal accordingly (e.g.- low rate on dividends means try corp, etc.). If the treaty is not useful, you’re talking fairly serious bucks for advice- at that point accessing 100k becomes expensive, assuming that the 31% withholding can be avoided at all.

John Hyre


#4

Re: so he has money to invest, now what …? - Posted by Rob FL

Posted by Rob FL on February 25, 1999 at 21:57:17:

If it were me, I would rather have him hold a note or mortgage than be a partner in the deal.


#5

Re: so he has money to invest, now what …? - Posted by Bud Branstetter

Posted by Bud Branstetter on February 25, 1999 at 19:22:10:

Not to start something but if all the rest of us have to pay taxes on income produced here, why shouldn’t he.

I personally prefer the participatory loan to partnerships and corporations. If the percentage profit isn’t acceptable then let him invest on his own.

Yes there are legal ways to funnel the profits to off shore corporation. In turn the profits are moved to another offshore corporation that the IRS has no purview over. For the money you are talking about the setup is probably not worth it.