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Author: kh Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35387  
Subject: Re: Buying Bonds Based on Euro Date: 11/16/2000 1:10 AM
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((((((Especially, how do I do it using IRA/401K funds?))))))

I am not familiar with the rules governing offshore accounts, so obviously I can't comment on them. As for "conventional" international investing—that is, buying shares in a US mutual fund company's global or international funds—I can say that there is a tax issue that you and your accountant should consider.

One problem with keeping foreign investments in retirement (nontaxable) accounts is that, in most cases, you lose the benefit of the foreign tax credit. Investors who keep their foreign investments in regular (taxable) accounts can use the foreign tax credit to offset income from other sources. This credit, however, is not available to nontaxable accounts.

For IRAs or 401ks with large account balances, the lost foreign tax credit can, in some cases, be significant. In such cases, you may decide that your are better off keeping the international investments out of your retirement accounts. On the other hand, for diversification or other reasons, you may decide it would be worthwhile to overlook the lost credit and keep the investments within your retirement account. Again, talk to your accountant.
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