off shore account

[kel789]

do you folks have an off shore account? what are the risks?

[Skooby]

What exactly is an off shore account anyway?

[aida2003]

What exactly is an off shore account anyway?

I think it's like hidden from Uncle Sam in order to evade paying taxes

[money2008]

If the off-shore account is held by a US based financial institute, they will most likely have your SSN and can provide 1099 on interest income. In all other cases you have to declare the interest income yourself (with appropriate currency conversion) and pay tax on it while filing US tax returns. If the off-shore investment is more than 10K, you have to declare it while filing the returns regardless of interest income and also have to file Form TD F 90-22.1 with the department of teasury before June 30th of each year.

[Broken Arrow]

I don't have one, so I can't help you much. However, it's a generic question anyway so....

As far as I know, an off-shore account is basically any financial account that is not within the legal jurisdiction of the United States. Hence the name "off shore".

Why have an off-shore account? As stated earlier, the primary benefit is that it's not subject to US laws, and hence (or at least theoretically), it's not subject to US taxes either. However, they ARE subject to that nation's laws and taxes! Anyway, that's why Swiss bank accounts are so popular, because the Swiss government has very strict laws regarding banking privacy. I read somewhere that they will not reveal your bank information, even if Uncle Sam can prove that you're evading taxes. However, they will if you're an axe murderer.

Now, why don't I have an off-shore account? Because:

1. They are still subject to host country's regulations and taxes.

2. You typically have to pay an intermediary investment firm to handle the transactions for you, and financiers who can speak English and German/Swiss Dutch for example don't come cheap....

3. Because of #2, intermediary firms don't want to talk to you unless you're bringing a lot of dough to the table. Some firms require a minimum balance of $1 million.

4. Just because it's an "off-shore" account, that doesn't mean it's also a superior financial product. For example, to some extent, a checking account is still a checking account, regardless of the country of origin.

5. Because it's foreign, so are a lot of the investments and it can be hard to research them. Again, this is where you're going to pay handsomely for your investment firm to manage things for you....

And that's basically why I don't have an off-shore account. Really, unless you just hate this country, I think it'd be much easier to just use domestic, tax-efficient investments. And if you should strike it rich somehow, you'll still want a good domestic tax attorney and financial planner anyway (and maybe a corporations attorney as well).

[dollarsaign]

I been wondering about this too. It seems like your money can do more while offshore than here in the U.S.