Tax Issues for Forex Traders (USA)

damien17

Recruit
Messages
4
Ok guys, calm down. He does not do something extremely complicated. All the legal US aliens holding an H1B/F1/L1/etc VISA trade exactly the same way. When they open their account they claim that they live in their country of citizenship (passport/utility bills from parents home) where they obviously have no income to declare so no tax filling and thats all story.
 

Pharaoh

Colonel
Messages
19,900
Oh cool! Then (assuming your girlfriend doesn't take the money and disappear), then you and/or your girlfriend are potentially liable to the Ukrainian government for tax evasion.

I wonder if a Ukrainian prison is like Club Fed. Somehow, I doubt that Martha Stewart redid the decor over there. :D


You don't UNDERSTAND!
There is no evasion... this account is owned and funded by a UKRAINIAN!
USA has nothing to say about this!!!!
duh..... :D
 

OzWizard

Corporal Punishment
Messages
88
It is better to remain SILENT and be thought a FOOL...

Oh cool! Then ....... are potentially liable to the Ukrainian government for tax evasion.
:D
.... then to POST here and remove ALL DOUBT!! :p

There is no Income Tax as such in UKRAINE!! ha
 

Pharaoh

Colonel
Messages
19,900
... than to speak and remove all doubt.

.... then to POST here and remove ALL DOUBT!! :p

There is no Income Tax as such in UKRAINE!! ha
Then why bother with all the subterfuge of placing the account in your girlfriend's name?

Unless, of course, you are residing in (or are a citizen of) another country that does have taxes on this sort of investment income, even if the income is in a Ukrainian account.

Thus, logic suggests that either you are deliberately evading the tax laws of some country (USA, judging from one of your prior posts) or you are trusting your girlfriend with your money to keep the income hidden for no apparent reason.
:p

Even if (by some freakish loophole in tax laws) having a trustworthy Ukrainian girlfriend does (somehow) prove to be a (semi)legal form of tax evasion, there could be serious risks of massive injuries if I attempted to get such a girlfriend and my wife found out.
:D

As much as I don't enjoy giving money away to be wasted by my government, they do serve some legitimate purposes (like keeping Canada's huge and aggressive military from invading North Dakota - hee hee!). I also prefer to keep all of my dealings legitimate and above board.

Now if anyone has any suggestions for legitimate ways to shield some forex profits from taxation, I'd love to hear them.
 
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OzWizard

Corporal Punishment
Messages
88
Then why bother with all the subterfuge of placing the account in your girlfriend's name?

Unless, of course, you are residing in (or are a citizen of) another country that does have taxes on this sort of investment income, even if the income is in a Ukrainian account.
Yeah, I am from USA... if account is in my name I pay USA tax!

Even if (by some freakish loophole in tax laws) having a trustworthy Ukrainian girlfriend does (somehow) prove to be a (semi)legal form of tax evasion, there could be serious risks of massive injuries if I attempted to get such a girlfriend and my wife found out.
:D
And she has NO idea where this $$ is.....

As much as I don't enjoy giving money away to be wasted by my government, they do serve some legitimate purposes (like keeping Canada's huge and aggressive military from invading North Dakota - hee hee!). I also prefer to keep all of my dealings legitimate and above board.
I prefer to keep 93% + of trading profits.........
 

Pharaoh

Colonel
Messages
19,900
I prefer to keep 93% + of trading profits.........
And I prefer to not do anything that could result in spending quality time at Club Fed, even though I hear it is much nicer now that Martha Stewart redecorated it. I'm reasonably sure they don't permit unlimited internet access there, and that could interfere with attempting to make further profits.
 

AlexTrader

Private
Messages
5
OzWizard,

Your Ukrainian gf owes personal income tax on worldwide income of 15% depending on how much her account made or lost.

In Ukrainian individuals are classified into two categories for income tax purposes:
  • Residents are liable for tax on their worldwide income. The standard rate is applicable to most types of income, including salary, dividends, royalties and investment income. Special tax rates apply in some cases specifically established by the law (e.g. inheritance, gifts, winnings and prizes, interest from deposits). Taxable income of foreign nationals who are tax resident in Ukraine is determined in the same manner as for Ukrainians.
  • Non-residents are liable for tax only on their Ukrainian source income. A double tax rate (i.e., 30%) applies, except for interest, royalty, dividends and for salary received from a Ukrainian employer.
Generally you are tax resident if you are Ukrainian citizen or reside there for 183 days during the calendar year.

Investment income
Income from the sale of investment assets is determined independently of other income. The gain or loss is determined for each investment asset sold (sales proceeds less acquisition cost), and then aggregated for the year. If the aggregate amount is positive, it is subject to tax at the standard 15% tax rate. If the aggregate amount is negative, it is carried forward and applied against investment income in subsequent years. There are no requirements in the law for individuals to report sales income based on market values. However:
  • The tax value in the hands of the person buying the financial asset will be the amount paid. In the case of a gift, the recipient is deemed to have acquired the asset for a zero value.
  • If an investment asset is sold to a related person at a loss, the loss is disregarded. Losses when an asset is gifted are also disregarded.
The following transactions are also treated as the sale of an
investment asset:
  • The exchange of one investment asset for another investment asset. The sales proceeds are deemed to be the market value of the shares that the individual transfers.
  • The redemption of a corporate right by the issuer.

CONSULT YOUR TAX PROFESSIONAL - for more information.

Now you !
Unless you have paperwork that when you got money from her account, she gave those money to you as a low cost loan and there is evidence that you are paying it back, even if its "interest only" at 0.5% a year for first 50 years, i.e. its not a sham loan, you will have to declare it as taxable income in US if you are US citizen or live in US for over half a year (read Tax law for more specifics of how long of your stay in US will make you incur US tax liability)

I don't like phrase "Tax avoidance" too close to "Tax evasion", I like "Lowering tax liability" and any such work can't be based on shaky financial "confidentiality" or "secrecy" practices or laws. In recent years most of them were penetrated or amended to let law enforcement to look into any account. So, minimizing of your tax liabilities should not be based on secrecy if you don't want to be nailed at some time.

My guess paying 15% is better than 40%, but if you are making a lot of money on her account and want to report it there you should make sure that she has adequate protection since in Ukraine its easy for mafia to find people who make a lot of money and demand that they share.

-= Not an advise or practice of law. =-

But I know of ways for US citizen/tax payer to legally pay 10% or less. And no I would not publicly talk about it since IRS could be reading it and does work to close loop holes every year by passing new tax laws, well unless I get reimbursed since I had spent a lot to learn about it. BTW, loop holes are not illegal in US as they are in some other countries. And there are some that are so huge that are not likely to be closed since there are powerful lobbing groups that would not let them to be closed.
 
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rayale78

Recruit
Messages
1
Tax to be or not to be

Does anyone know why we pay taxes ? Here is the history of it as short as I can make it . First I 'll give anyone 10 ,000 dollars to someone who can produce the law that requires us to pay taxes . First most people do not understand that the Gov, uses words differently than us . First question is , are you a US citizen , the definition in Blackman's Law and the IRS Tax Code is as follows : a person living in a geographically area of Puerto , Soma , Virgin Islands , any common wealths , any territories and the 10 mile wide District of Columbia . So if you live in of these places or you have applied for US citizenship ,, then you are a US citizen subject to taxation .

My wife is from Puerto , now she is a US citizen , so how can she be a US citizen and me be a US citizen . She can from a territory and I was born in the State of the Union . Here's a little history . After our country was born ,for almost a 100 years there was only 13 admenments , then came the 14 th which made the US citizen . SO the US citizen didn't exist for 100 years . What happen was the Gov , came to congress and said that the cost of keeping law and order in the existing territories , until they became states of the Union , was costing to much . So congress made the US citizen . Who is subject to the US Gov for taxation . The order of power by the founding fathers was God who created the American , the American people who created the US Gov , and then the US Gov who created the US citizen .

So the question now is how do you as an American lower yourself to a US citizen . This year look at your 1040 a little different . At the top it says US individual tax form . Well if it was for you it would say USA individual tax form . The word form by Gov , terms means contract so when you sign this 1040 you are signing a contract . In 1988 congress cleared up their meaning and use of the 1040 by adding the word LABEL in big bold print . We think it's the sticky thing . The meaning of label can also be a smaller writing attached to a larger writing or a codicil . The smaller writing is the 1040 attached to your constitutional rights .. A codicil is something that changes or modifies your will . So in effect when you sign your 1040 you have just declared that you no longer want to be a USA citizen , or American , but for last year you want to be a US citizen who can be taxed . People who have gone to jail because they signed a 1040 and then cheated and got caught . remember they signed a contract . For the record every penny you send in for your income taxes does not go to run our country and the IRS is not a government agency , look in the phone book in the blue pages , their not there. The IRS has a CODE Book , not law .And yes go ask your CPA or any one else in the tax business about what I have just said , because if they ever admit to what I'm saying , they will be out of a JOB . Think of how many people over night would be jobless. Sorry to vent but I,m tired of watching a country I love go down the tubes and watching people go to jail because their crime was , they were trying to make a living . I have never posted on any form before but just thought you might like some food for thought . If your happy payiny taxes , pay on attention to what I just wrote .
 
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