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Subject:  Re: Investing from offshore accounts Date:  11/29/1998  8:24 PM
Author:  galeno Number:  6581 of 127519


Thanks for the advice. But I'm standing on pretty firm ground--I think. My withhold rate is the the default rate as my country does not have a tax treaty with the USA.

The $60,000 exemption is for non-US persons (neither citizens or legal aliens). US persons get to exempt $600,000 from their estate taxes.

This info comes from a US CPA in Panama City.


[[I have the opposite problem. I'm a non-US citizen who would like to invest though an inexpensive
US discount brokerage. I wouldn't get taxed on my capital gains and the IRS would withhold only
30% of my dividend and interest income.]]

Or perhaps even less. Remember that the 30% rate is the "default" rate. Depending upon your home
country, and the tax treaty that your home country has with the US, your rate could be less. If you
would like to check that out, you can read IRS Publication 901 at the IRS web site. That publication
will tell you what the specific tax treaty issues are with respect to your home country.

And remember also that you must be a non-citizen AND non-resident in order to receive this
"benefit". If you are a "resident alien", you would also have to pay taxes on worldwide income...just
like any other US taxpayer. So make sure that you KNOW what you status actually is. IRS
Publication 519 can help you with that.

[[ As I understand it, my problem is the US policy of only exempting $60,000 from US inheritance
taxes. American citizens and legal aliens get to exempt $600,000. If I died suddenly, my kids
would loose a lot of $$$.]]

But, again, this will only impact you if you are a US resident. If you are a non-citizen and
non-resident, the potential estate tax pounding will not apply to you. So you really need to define your
"status" with Uncle Sammy in one quick hurry. You may be under some assumptions that may not
necessarily be true.
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