U.S. Expat Tax preparation with PFIC issues

by Aaron A Day on March 2, 2013

If a U.S. person receives income from a PFIC or recognizes gain from disposition of shares of a PFIC, such person is subject to a tax and interest regime. For purposes of income tax in the U.S., U.S. persons owning shares of a passive foreign investment company (PFIC) must report them.

We’ve had some people look at our Regulator Asset Protection Structures and they say; “oh this looks good and seems very simple” but they don’t fully realize how good it is unless they’ve previously attempted to open an offshore bank account or purchase any offshore investments. Even if they own an Offshore LLC, or IBC (International Business Company) which may have an existing offshore bank account, they still can’t buy any investments.

“In summary, The IRA Passive Custodian in the USA and the Luxembourg Active Custodian Investment Account eliminates the IRC Section 4975 problems of the “Checkbook” IRA LLC because you are managing the LLC but you are not acting as a Custodian.

The Tax Deferred Foreign Retirement Account is reported on FBAR and IRS Form 8938 is “Excluded” from Reporting by the IRS because it is an IRA Account.

The Foreign Retirement Plan Administrator is specifically excluded from reporting under FATCA Law. Therefore the Luxembourg Investment Account Custodian has no USA reporting or withholding requirement.

No withholding or reporting requirement is the reason the Active Custodian is willing to open an account for a USA person in Luxembourg.

There are no USA Person “Offshore” Fund Choice Restrictions and no PFIC nor FATCA issues.” Contact us today for a solution to PFIC problems.

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