US Tax on Foreign
Source Investment
Income

BY
WWW.PROFITABLEINVESTINGTIPS.COM
Many investors look outside of the USA for
investment opportunities.

HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA
L-ESTATE-...
Our focus in this article is to look at US tax
on foreign source income.

HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA
L-EST...
Before looking at specifics of US tax on
foreign source income let us look at
foreign investing.

HTTP://WWW.PROFITABLEINV...
We are not talking about illegal tax havens
here but rather smart ways to invest your
money and perhaps legally reduce you...
Valid reasons for investing offshore include
the following and many more:

HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA
L-ES...
Diversification of an investment portfolio
Taking advantage of growth in evolving
offshore economies

HTTP://WWW.PROFITABL...
For example a developing nation may wish to
develop a given industry and will provide land at
a low price, extended freedo...
Low cost labor
Proximity to attractive markets

HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA
L-ESTATE-INVESTING/US-TAX-ON-FO...
Likelihood of appreciation of the currency
in which the investment will be made
Legal means of reducing a tax burden

HTTP...
Taking advantage of cheap investment
opportunities with the likelihood of
substantial grown

HTTP://WWW.PROFITABLEINVESTIN...
Some time back we wrote about Foreign
Real Estate Investments. In the Panama
section of the article we noted that

HTTP://...
one can buy commercial real estate in
growing market like Panama and collect rent
checks as property values go up. Even in...
We also noted that

HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA
L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOM...
the rent checks from commercial property
in Bogotá, or Buenos Aires can be banked
in Colombia pesos or Brazilian reals.

H...
Bank the proceeds from your property
offshore, make good interest from the local
bank, and watch your assets,
denominated ...
US Tax on Foreign Investment Income

HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA
L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE...
The key part of all this is that income is
taxed when it is realized.

HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA
L-ESTATE...
Here are a few key features of current US
tax law regarding US tax on foreign source
income.

HTTP://WWW.PROFITABLEINVESTI...
What Counts as a Foreign Financial
Asset

HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA
L-ESTATE-INVESTING/US-TAX-ON-FOREIGNS...
Bank accounts, investment accounts and
mutual funds maintained at financial
institutions outside the USA
Stocks, bonds or ...
Any interest in a foreign corporation,
partnership trust or other legal entity
Any financial instrument or contract
issued...
How much do you have to invest or make
in order to worry about US tax on foreign
source income?

HTTP://WWW.PROFITABLEINVE...
This ranges from $50,000 on the last day
of the year or $75,000 on any day of the
year for a single person living in the U...
As always there are tests to pass in order
to qualify according to IRS rules.

HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA
...
Our point of mentioning realized income is
that real property in an offshore location
does not appear to be in the list of...
If you would like to consider any of our
Three Good Offshore Investment Ideas,
think of offshore property either to buy an...
Think of investing where the currency is
weak and likely to strengthen over time,
making your investment more valuable as
...
In the end it is not so important to reduce
your tax burden as to find solid
investments.

HTTP://WWW.PROFITABLEINVESTINGT...
AND, as always consult a tax attorney
for the details before investing as laws
change as do investment opportunities.

HTT...
Upcoming SlideShare
Loading in …5
×

US Tax on Foreign Source Investment Income

518 views

Published on

US Tax on Foreign Source Investment Income

http://www.profitableinvestingtips.com/real-estate-investing/us-tax-on-foreign-source-investment-income

Many investors look outside of the USA for investment opportunities. Our focus in this article is to look at US tax on foreign source income. Before looking at specifics of US tax on foreign source income let us look at foreign investing. We are not talking about illegal tax havens here but rather smart ways to invest your money and perhaps legally reduce your tax burden when investing outside of the USA. Valid reasons for investing offshore include the following and many more:

• Diversification of an investment portfolio
• Taking advantage of growth in evolving offshore economies
• Foreign government sponsored investment opportunities
o For example a developing nation may wish to develop a given industry and will provide land at a low price, extended freedom from local taxation and other significant benefits to a specific type of foreign investment
• Low cost labor
• Proximity to attractive markets
• Likelihood of appreciation of the currency in which the investment will be made
• Legal means of reducing a tax burden
• Taking advantage of cheap investment opportunities with the likelihood of substantial growth

Some time back we wrote about Foreign Real Estate Investments. In the Panama section of the article we noted that

one can buy commercial real estate in growing market like Panama and collect rent checks as property values go up. Even in good markets there are business failures. Buying repossessed properties in a country like Panama can be lucrative if one has the services of a local firm that will scout out investment opportunities.

We also noted that

the rent checks from commercial property in Bogotá, or Buenos Aires can be banked in Colombia pesos or Brazilian reals.

  • Be the first to comment

US Tax on Foreign Source Investment Income

  1. 1. US Tax on Foreign Source Investment Income BY WWW.PROFITABLEINVESTINGTIPS.COM
  2. 2. Many investors look outside of the USA for investment opportunities. HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  3. 3. Our focus in this article is to look at US tax on foreign source income. HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  4. 4. Before looking at specifics of US tax on foreign source income let us look at foreign investing. HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  5. 5. We are not talking about illegal tax havens here but rather smart ways to invest your money and perhaps legally reduce your tax burden when investing outside of the USA. HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  6. 6. Valid reasons for investing offshore include the following and many more: HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  7. 7. Diversification of an investment portfolio Taking advantage of growth in evolving offshore economies HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  8. 8. For example a developing nation may wish to develop a given industry and will provide land at a low price, extended freedom from local taxation and other significant benefits to a specific type of foreign investment HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  9. 9. Low cost labor Proximity to attractive markets HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  10. 10. Likelihood of appreciation of the currency in which the investment will be made Legal means of reducing a tax burden HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  11. 11. Taking advantage of cheap investment opportunities with the likelihood of substantial grown HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  12. 12. Some time back we wrote about Foreign Real Estate Investments. In the Panama section of the article we noted that HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  13. 13. one can buy commercial real estate in growing market like Panama and collect rent checks as property values go up. Even in good markets there are business failures. Buying repossessed properties in a country like Panama can be lucrative if one has the services of a local firm that will scout out investment opportunities. HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  14. 14. We also noted that HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  15. 15. the rent checks from commercial property in Bogotá, or Buenos Aires can be banked in Colombia pesos or Brazilian reals. HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  16. 16. Bank the proceeds from your property offshore, make good interest from the local bank, and watch your assets, denominated in a healthy foreign currency, growth as US debt eats into the value of the US dollar. HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  17. 17. US Tax on Foreign Investment Income HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  18. 18. The key part of all this is that income is taxed when it is realized. HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  19. 19. Here are a few key features of current US tax law regarding US tax on foreign source income. HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  20. 20. What Counts as a Foreign Financial Asset HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  21. 21. Bank accounts, investment accounts and mutual funds maintained at financial institutions outside the USA Stocks, bonds or other securities issued an entity not of the USA and not an ADR or other asset held in an US investment account HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  22. 22. Any interest in a foreign corporation, partnership trust or other legal entity Any financial instrument or contract issued by an entity from outside of the USA HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  23. 23. How much do you have to invest or make in order to worry about US tax on foreign source income? HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  24. 24. This ranges from $50,000 on the last day of the year or $75,000 on any day of the year for a single person living in the USA with assets abroad to $400,000 at the end of the year or $600,000 at any time of the year for a married couple living abroad. HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  25. 25. As always there are tests to pass in order to qualify according to IRS rules. HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  26. 26. Our point of mentioning realized income is that real property in an offshore location does not appear to be in the list of offshore assets considered taxable by the US government. HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  27. 27. If you would like to consider any of our Three Good Offshore Investment Ideas, think of offshore property either to buy and hold, or for eventual sale and profit or for rental income. HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  28. 28. Think of investing where the currency is weak and likely to strengthen over time, making your investment more valuable as well. HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  29. 29. In the end it is not so important to reduce your tax burden as to find solid investments. HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME
  30. 30. AND, as always consult a tax attorney for the details before investing as laws change as do investment opportunities. HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/REA L-ESTATE-INVESTING/US-TAX-ON-FOREIGNSOURCE-INVESTMENT-INCOME

×