Posts tagged foreign

Hello,
I have talked to a couple CPAs and they are looking into this but I wanted to get your help since there are so many of you who are experts in these matters. I am an American and I pay my capital gain taxes on my stocks (usually 35% since I buy and sell in less than 365 days). My broker told me that you don’t need to be an American to open an account with them and one advantage is that these folks are exempt from US taxes since they may (or may not) be liable for their local countries’ taxes. I have immediate relatives who are overseas and not US citizens or residents and I have been thinking about the following scenario to avoid taxes LEGALLY (not evade them): Let’s say I bought a stock for $500, and it went up to $1500 and I haven’t sold it yet. If I tranfer my balance to a new INDIVIDUAL account in the name of my relative, is that possible and does that mean when my relative cashes out (I will maintain control of that account for them), I myself don’t have to pay taxes? How should I treat this transaction/transfer when I do my taxes (gift, sell…etc, in the sell case, I guess I have to pay taxes as of the date of the sale) But what if it keeps appreciating while in their account? What would be the impact on me?

My broker told me that individual accounts may cause me a problem since it will be in their name and if I intend on using that account, I may have problems especially when I need to cash out and wire money in and out (my relative doesn’t have a US bank account). My broker suggested opening a JOINT account and making my relative to be the primary and I make myself the secondary, this way I can continue to buy and sell and wire money in and out with no issues. In this case, the primary would liable for taxes (which in this case would be 0 since he not a citizen) and I maintain my privilges of trading using that account as I please.

Please share your thoughts and as I said, I want to do this the right and legal way. Thanks much.