U. S. Taxes on Worldwide Income

Some of you guys have been discussing high U.S. tax rates on the American Politics thread. As we all know, such taxes are generally applicable to your worldwide income.

So here's a hypothetical question for tax / financial gurus.

Let's say you won the national lottery of Argentina for the equivalent of USD 1 million and that lottery winnings are not taxable by Argentina.

The USA is going to tax that at around 40% depending on your state, chopping your 1 million down to around 600k.

So what would you do - transfer the money to Switzerland or the Caymans? Buy some apartments in Buenos Aires? Transfer all the funds to the USA and pay the IRS 400 grand? Other?

Are there any reasonable loopholes for such a scenario?

[QUOTE=Moore]Some of you guys have been discussing high U. S. Tax rates on the American Politics thread. As we all know, such taxes are generally applicable to your worldwide income.

So here's a hypothetical question for tax / financial gurus.

Let's say you won the national lottery of Argentina for the equivalent of USD 1 million and that lottery winnings are not taxable by Argentina.

The USA is going to tax that at around 40% depending on your state, chopping your 1 million down to around 600k.

So what would you do - transfer the money to Switzerland or the Caymans? Buy some apartments in Buenos Aires? Transfer all the funds to the USA and pay the IRS 400 grand?

Are there any reasonable loopholes for such a scenario?[/QUOTE]There are no loopholes. You pay the tax or you break the law. The Cayman Islands and Switzerland now share information with the IRS. You can leave the money in Argentina or create dummy foreign companies with dummy directors and try and hide the money, but that's still illegal, and not worth the risk or the expense IMHO.

[QUOTE=Moore]Some of you guys have been discussing high U. S. Tax rates on the American Politics thread. As we all know, such taxes are generally applicable to your worldwide income.

So here's a hypothetical question for tax / financial gurus.

Let's say you won the national lottery of Argentina for the equivalent of USD 1 million and that lottery winnings are not taxable by Argentina.

The USA is going to tax that at around 40% depending on your state, chopping your 1 million down to around 600k.

So what would you do - transfer the money to Switzerland or the Caymans? Buy some apartments in Buenos Aires? Transfer all the funds to the USA and pay the IRS 400 grand? Other?

Are there any reasonable loopholes for such a scenario?[/QUOTE]The tax's are taken out before they give you the check, this topic is moot.

Exon

[QUOTE=Exon123]The tax's are taken out before they give you the check, this topic is moot.[/QUOTE]As mentioned, assume that the income is not taxable in Argentina, where it is paid.

[QUOTE=Moore]As mentioned, assume that the income is not taxable in Argentina, where it is paid.[/QUOTE]Then I'd spend the entire amount on "Hoe's" and booze, the rest I'd just waste.

Exon

[QUOTE=Exon123]Then I'd spend the entire amount on "Hoe's" and booze, the rest I'd just waste.

Exon[/QUOTE]Me too fuck Uncle Sam

You guys could spend a million dollars on ho's and booze?

[QUOTE=Exon123]The tax's are taken out before they give you the check, this topic is moot.

Exon[/QUOTE]Exon, you've once again again shown your wordsmithing abilities.

What an excellent pun, given that taxes are possessive.

Ha, ha.

Jackson

[QUOTE=Exon123]Then I'd spend the entire amount on "Hoe's" and booze, the rest I'd just waste.

Exon[/QUOTE]Exon, just a little credit to one of our predecessors:

"I spent all my money on booze, broads and fast cars. The rest I just pissed away."

George Raft's response to an IRS agent.

OK, Now I get it. Tom Daschle, Timothy Geithner, Al Franken, Leona Helmsley, Exon123 -- the reason Democrats don't care whether taxes go up is because they don't intend to pay them anyway.

[QUOTE=Tiny12]OK, Now I get it. Tom Daschle, Timothy Geithner, Al Franken, Leona Helmsley, Exon123 -- the reason Democrats don't care whether taxes go up is because they don't intend to pay them anyway.[/QUOTE]My taxs are paid on time every quarter.

Exon

If you have the $ in Argentina, or somewhere ELSE and you do NOT spend it and bring it into the US. Then you do not have to pay tax on that. But if you use a CC that is linked to that account in the us then you have to declare it.

As long as you keep it separate you should be ok, someone correct me if it's otherwise.

Thanks.

[url]http://www.irs.gov/publications/p54/index.html[/url]

[QUOTE=SanMichele]If you have the $ in Argentina, or somewhere ELSE and you do NOT spend it and bring it into the US. Then you do not have to pay tax on that. But if you use a CC that is linked to that account in the us then you have to declare it.

As long as you keep it separate you should be ok, someone correct me if it's otherwise.

Thanks.

[url]http://www.irs.gov/publications/p54/index.html[/url][/QUOTE]Doing what you say would reduce the possiblity the IRS will find out you have undeclared foreign income and charge you penalties and interest or possibly put you in jail. If you have income anywhere in the world, you're supposed to declare it on your U. S. Tax return. You might get away without paying additional tax, depending on the circumstances. If you have over $10,000 stashed in foreign accounts, you should file Form TD F 90-22.1 with the U. S. Government. If you do not, I believe the standard fine is $10,000 per year per account (plus penalties and interest) although failure to file or filing a false report can result in a fine up to $500,000 and imprisonment up to 5 years, according to what it says on the form.

I'm assuming here that the money you might have stashed in Argentina came from income you didn't report to the IRS. If you, say, took $9000 into Argentina and put it in a noninterest bearing bank account, and you don't have bank accounts in other countries outside the U. S. (so you don't have over $10,000 total outside the US) then you wouldn't need to do anything or file any forms. That's assuming you reported the $9000 income to the IRS when you earned it.

[QUOTE=Tiny12]Doing what you say would reduce the possiblity the IRS will find out you have undeclared foreign income and charge you penalties and interest or possibly put you in jail. If you have income anywhere in the world, you're supposed to declare it on your U. S. Tax return. You might get away without paying additional tax, depending on the circumstances. If you have over $10,000 stashed in foreign accounts, you should file Form TD F 90-22.1 with the U. S. Government. If you do not I believe the standard fine is $10,000 per year per account (plus penalties and interest) although failure to file or filing a false report can result in a fine up to $500,000 and imprisonment up to 5 years, according to what it says on the form.

I'm assuming here that the money you might have stashed in Argentina came from income you didn't report to the IRS. If you, say, took $9000 into Argentina and put it in a noninterest bearing bank account, and you don't have bank accounts in other countries outside the U. S. (so you don't have over $10,000 total outside the US then you wouldn't need to do anything or file any forms. That's assuming you reported the $9000 income to the IRS when you earned it.[/QUOTE]Was watching MSNBC this morning and this exact topic came up. Larry Kudlow (love him or hate him,) was throwing out the possibility that the Gov. Eradicate this foreign income tax plus lower tax rates in the States and that would allow about 500 billion of expatriate money to come back into the US markets. Pipe dream? Possibly. Good idea though especially since they're tweaking the stimulus package right now.

Jack

[QUOTE=Jackjack1]Was watching MSNBC this morning and this exact topic came up. Larry Kudlow (love him or hate him, was throwing out the possibility that the Gov. Eradicate this foreign income tax plus lower tax rates in the States and that would allow about 500 billion of expatriate money to come back into the US markets. Pipe dream? Possibly. Good idea though especially since they're tweaking the stimulus package right now.

Jack[/QUOTE]Larry K must be following the Kirchners. And, speaking of Kudlow, what do you think?:

1. Fag.

2. Pedophile.

3. Asexual