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US citizens won't be able to have forex accounts overseas

  • #481
  • Sep 5, 2010 6:14am Sep 5, 2010 6:14am
The only way you can get out of paying US taxes on your business revenue is if your business is established in another country as a corporation taxed as such in that country. Anything you pay yourself as wages or dividends from that business will be taxable by the IRS as income from that business, regardless of where it resides. But the nonresident corporation can retain its revenue unassailed by the IRS and reinvest it, use it to pay expenses, etc, as I noted. If you go so far as to obtain dual citizenship you may have to pay income taxes in both countries. Also, I don't actually know what the corporate taxation situation is in Panama or CR (for instance) - you'd of course need to do that DD going in - find a good english-speaking corporate or tax attorney in country and pay him to guide you.

You're going to pay the Man down the line somehow, wherever it may be.

"I have heard you can be exempt to up to 91,400$ in taxes if you can prove you lived and made the money outside the US for that whole year."

Right. Hmm, I am not sure how that might factor in if that income is derived from a foreign business entity that you owned or had a share of.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #482
  • Sep 5, 2010 6:24am Sep 5, 2010 6:24am
The Fool, cool, I'll look more into it, though as you said, I think you need to pay someone in the know to really find out how to go about it. I mean, I wouldn't mind paying some taxes as a U.S citizen, but I am sure there are ways to back the normal taxation down a decent amount if you're living and doing business outside the country.
  • #483
  • Sep 5, 2010 6:31am Sep 5, 2010 6:31am
Quoting Monroe
The Fool, cool, I'll look more into it, though as you said, I think you need to pay someone in the know to really find out how to go about it.
Yup, probably. A first step would be to take an extended trip to wherever it is. See if you like the place (assuming you have not already figured that out.) The good thing about Panama, CR, etc is that there is already a large expat community there. You can hook up with some of them (I think there are expat "Chamber of Commerce" type organizations even) and you will find people who can help guide you, refer you to attorneys & other professionals, etc.

Good Luck.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #484
  • Sep 5, 2010 6:38am Sep 5, 2010 6:38am
Thanks The Fool, yea... I have a few places in mind, I have to look more into a few things with all of them. At first I would just live there and rent for a few months most likely while keeping my business in the States, just to make sure it's what I like before making any big decisions as to start a corporation there, and get on with it. It's not a rush at this point, but it is on my to-do list as I'd like to do this within a few years time.

sorry for hijacking this thread... I am still waiting for the news on this overseas account thing... doesn't look good right now.
  • #485
  • Sep 5, 2010 12:37pm Sep 5, 2010 12:37pm
Quoting azjeff
Before any of that you are going to have to give up a lot of your money to payoff uncle sam before you can give up your citizenship...
You do not give up your U.S. citizenship just because you gain another.
  • #486
  • Sep 5, 2010 12:44pm Sep 5, 2010 12:44pm
Quoting Pipstrumpf
To clarify the leverage for CFD's here in Australia is 10:1 to 20:1 and no bank, broker, bucket shop, criminal you named will let you trade CFD's here in Australia if you are an US Citizen.
I do not pretend to know better than you because you are there. However, everything I've ever investigated on this (including in Australia) indicated that it merely takes a driver's license to demonstrate residency in most cases. Residency seems to always be the determining factor. Also, according to this, leverage can be as high as 200:1 or as low as 1:10, depending on the broker and instrument.
  • #487
  • Sep 5, 2010 12:51pm Sep 5, 2010 12:51pm
Quoting The Fool
...The CFTC approves all kinds of derivatives trades...
Yes, but as far as I know the highest built-in leverage is 3:1.

Quoting The Fool
...Are CFD's "inherently" highly leveraged? ....
Actually, no, I mis-stated. They are typically highly leveraged, but without the leverage you would just trade the underlying equity, commodity, etc.
  • #488
  • Sep 5, 2010 1:04pm Sep 5, 2010 1:04pm
I never said you would. First item is if you want to you have to apply for it. The us govt can still turn you down even if you wanted to give it up. Plus, all the other items I mentioned before are still valid. if you do not give it up then you may have to pay taxes in two countries. Again people need to consult a tax lawyer.

Regards,
Jeff

Quoting TradeWell
You do not give up your U.S. citizenship just because you gain another.
  • #489
  • Sep 5, 2010 2:04pm Sep 5, 2010 2:04pm
Quoting azjeff
I never said you would. First item is if you want to you have to apply for it. The us govt can still turn you down even if you wanted to give it up. Plus, all the other items I mentioned before are still valid. if you do not give it up then you may have to pay taxes in two countries. Again people need to consult a tax lawyer.

Regards,
Jeff
OK Jeff. No disagreement, just clarifying. Some people have a misconception about that issue. By the way, many countries have reciprocal agreements whereby you get a credit against taxes you owe in country "A" for paying taxes in country "B". Again, people need to consult a tax lawyer.
  • #490
  • Sep 5, 2010 4:36pm Sep 5, 2010 4:36pm
Quoting TradeWell
I do not pretend to know better than you because you are there. However, everything I've ever investigated on this (including in Australia) indicated that it merely takes a driver's license to demonstrate residency in most cases. Residency seems to always be the determining factor. Also, according to this, leverage can be as high as 200:1 or as low as 1:10, depending on the broker and instrument.
TradeWell,

Not a problem.
Brokers here or in most countries ask you for an ID such as Passport or driver license and as a second item they require a recent household bill with your resident address printed on. Sometimes they go even further and you need to get those items certified by two separate parties such as a police officer for example.
Leverage 10:1 is for CFD's on equities (no roll over) and the CFD's on futures requires a margin of generally $ 500 per contract (with roll over every 3 month).
Then again why trade CFD's on futures when you can trade directly 1 e-mini contract for a margin of $500, same price?
Cheers
  • #491
  • Sep 7, 2010 9:42am Sep 7, 2010 9:42am
Quoting ecTrade
And, if they didn't conduct the study or, solicit public comment, how exactly do we interpret that?

Again, when was this study supposed to occur?

A few points on Dodd-Frank Section 929Y. First, this is a mandate for the SEC to undertake a study with regard to the extraterritorial reach of the Securities Exchange Act. This is not directly related to the Commodity Exchange Act or the CFTC.

In terms of timing, the SEC has 18 months from the enactment of Dodd-Frank to report the results of such study. That means they must report the findings by January of 2012.
  • #492
  • Sep 7, 2010 9:26pm Sep 7, 2010 9:26pm
Quoting TradeRunner
"G'day!

IBFX Holdings invites you to celebrate with us in the grand opening of our subsidiary company, IBFX Australia Pty Ltd. We hope you’ll embrace our family as we launch IBFX Australia.

In light of the recent CFTC off-exchange retail foreign currency regulations, which will reduce leverage to 50:1(effective October 18, 2010), IBFX Australia will be accepting applications immediately...
This is the exact same email I got from IBFX. Don't know why you didn't come right out and say you weren't accepting applications from folks from the United States (or, maybe you're not with IBFX?), since this is afterall, what this thread is about?

"... Thank you for submitting your application. We have reviewed your application and determined we are unable to approve an account for you because you are a citizen or resident of the United States. The Dodd-Frank Act prohibits IBFX Australia from holding accounts for customers who are citizens or residents of the United States. As an alternative, you may open an account with Interbank FX, our United States subsidiary. Please visit www.ibfx.com for more details on how to apply for an account. We apologize for any inconvenience this may cause. Kind regards, Accounts Department ..."
  • #493
  • Sep 8, 2010 10:17am Sep 8, 2010 10:17am
Quoting ecTrade
This is the exact same email I got from IBFX. Don't know why you didn't come right out and say you weren't accepting applications from folks from the United States (or, maybe you're not with IBFX?), since this is afterall, what this thread is about?

"... Thank you for submitting your application....
The message was edited for quotation marks which was meant to say that no, I am not with IBFX.

I posted the message as part of the conversation as it said we will be accepting applications from "all retail traders". Due to the timing of the message that seemed to be saying they would be accepting applications from US residents as well.

So, my bad...... or maybe IBFX could have clarified that to begin with.
  • #494
  • Sep 8, 2010 11:01am Sep 8, 2010 11:01am
You know what's funny is I went ahead applied, and they said, "Great, you already have an account with us. We can use your existing account information so, all you need is to send us photo copies of your documents. They could just as easily said something at this time as well.

And yeah, IBFX could have been a lot more clear about it to begin with.

Oh, I just received an email from GoMarkets saying they could give a rats ass about what the CFTC thinks ...


"Dear Client,

Following a number of enquiries relating to the new CFTC regulations regarding Forex, we would like to clarify GO Markets position on these regulations.

GO Markets are regulated by ASIC (Australian Securities & Investment Commission) and are not regulated by the CFTC or any other US regulatory body. We have interpreted the Dodd-Frank bill to mean that we can still offer the same, great trading conditions including full hedging capabilities and up to 500:1 leverage for all clients.

We will continue to keep all clients informed on the matter.

Regards,
GO Markets Pty Ltd
www.gomarketsaus.com"
  • #495
  • Sep 8, 2010 11:06am Sep 8, 2010 11:06am
Hmmmm..... I seems to be a bit "up in the air" still. I asked Forex.com if their UK accounts for US residents would be moved back to the US (before Oct. 18) and they don't have an answer as of yet. They will issue a statement sometime later.
  • #496
  • Sep 8, 2010 11:17am Sep 8, 2010 11:17am
Quoting TradeRunner
Hmmmm..... I seems to be a bit "up in the air" still. I asked Forex.com if their UK accounts for US residents would be moved back to the US (before Oct. 18) and they don't have an answer as of yet. They will issue a statement sometime later.
Oh well, Go Markets says they "will continue to keep all clients informed on the matter" ... as if they might actually change their mind? Who knows?
  • #497
  • Sep 21, 2010 1:48am Sep 21, 2010 1:48am
I feel the noose tightening. Was just told by my trust company that I could not open a UK IRA account because the CFTC would not be allowing any more UK IRA accounts. I was also told that those US citizens who have accounts in the UK would have to bring them back.
  • #498
  • Sep 22, 2010 2:24am Sep 22, 2010 2:24am
To me the answer is straightforward. I have a Roth IRA at Gain Capital UK. At least so far, I've not been told I have to bring it back. If that happens, I withdraw the money, eat the 10% penalty (which would be completely covered by my recent earnings) & move the money to my australian broker to do as I want with it. These bastards won't break me, and life is too short to spend it with a grossly inferior US-based CFTC regulated broker.

The CFTC is not protecting our interests. The ways in which US-based brokers are inferior is a multi-paged post all its own. But at least in Australia I have a segregated bank account. At the FSA there is some insurance. At your CFTC regulated US broker you have zero, zilch, nada for protection. Your assets are mixed with operating brokerage funds & if you wind up in a Refco type situation, god help you 'cause you'll be an unsecured creditor in bankruptcy court. I just wish CFTC would do its job like deal with the recent gold market manipulation described in detail in real-time going on under their fat noses, or JP Morgan's manipulation of the silver market to benefit their short postion equal to half of world production. But noooooooooooo..... CFTC spends its time making sure we absolutely have to put our money completely at risk at mendacious and inferior US brokers, ostensibly for their good, not ours. Nauseating.

Bring back the guillotine. The french had the right idea.

That's all.
  • #499
  • Sep 22, 2010 2:47am Sep 22, 2010 2:47am
Probably a good idea to remove IRA funds anyway. Government moving toward confiscating those. First step is to coerce IRA funds into the "safety" of US Treasuries. They need somebody to buy them after the Japanese and Chinese wise up. Eventually they confiscate them altogether.

Look at Argentina as a road-map to life in the states within a few years. Anything you keep in the US you're going to lose as these jokers look to more creative ways to finance their profligate spending. "Spread it around". In this case, "it" means your retirement, your bank account & anything else you've been careless enough to let them get to. Precious metals buried in a hole in the back yard may be safest of all.

JMHO.
  • #500
  • Sep 22, 2010 10:45am Sep 22, 2010 10:45am
Its official, FXCM UK will have to move those US clients back home.
Welcome home guys!
http://bit.ly/apvoir

This is gonna hurt FXCM, badly.
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