James Wetterau wrote:
> Brian Atkins says:
> > to open an account with a US stock brokerage, and again using the
> > freedom software you could anonymously trade..
> Umm, US laws don't generally permit this type of thing, I think,
> though I'm not 100% positive. Certainly my brokerages wanted a *lot*
> of information about me, including IRS good standing. I guess there
> might be some that do it, but I think the SEC would take a dim view.
Actually it is quite possible for foreigners to open accounts at US
brokerages. I know Datek for instance allows it. I'm not saying it
would be a piece of cake, but it would be possible I think.
> > ... transfer your profits
> > occasionally back to the bank account, and from there to your US
> > bank account. You could tell the IRS you don't know who these magic
> > payments come from, perhaps a secret admirer :-) And voila, no more
> > capital gains taxes. ...
> Then, even worse, it's income! Even if it's an anoymous gift (yeah,
> right, the IRS believes that) you still owe income taxes on it.
> Income taxes are worse than capital gains taxes for non-trivial
> incomes. At least with regular capital gains they're exempt from any
> income taxes, municipal, state or federal.
Actually short term capital gains are taxed at the same rate as income.
Imagine you had $10,000,000 to play with. You're a short term trader
looking to maximize your profits over a year. You trade in and out of
stocks perhaps as often as every few days. If you have to pay the IRS
for the gains on each of those trades, it is going to be a heckuva lot
of money. And let's say twice a year you wire yourself anonymously just
enough money to live on, and keep investing the rest. You are going to
pay far far less tax, and that money will snowball into a huge number
quite a bit more quickly (assuming of course you're a good trader :-).
P.S. many states also tax capital gains at the income rate.
This archive was generated by hypermail 2b29 : Mon Oct 02 2000 - 17:34:47 MDT