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Author: jumpinjupiter One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Foreign Trust/Depository & tax saving/deferral Date: 4/5/2000 11:21 PM
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I would appreciate a pointer to high integrity books, publications or tax law references on this subject. Please do not respond with hear-say or second hand anecdotes.

"TMF Taxes" once wrote the following but recommended no specific references.

[
There are certain foreign trusts that can provide some US tax savings and/or deferral depending upon how they are structured. But this is a very complicated area, one that is well beyond the scope of this message folder. And you certainly would not want to get involved with any foreign trusts without the guidance of a qualified tax attorney.

If you are really interested in this issue, your local bookstore has a number of volumes on this issue that might be a place to start building your knowledge on this subject.

TMF Taxes
Roy
]

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Author: TMFExRO Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 33635 of 121061
Subject: Re: Foreign Trust/Depository & tax saving/defer Date: 4/6/2000 8:53 AM
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I'm sorry, I can't recommend any books, but I can recommend several posts to this board by Chris Riser. Do a search for posts authored by "criser."

TMF ExRO
Phil Marti

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Author: criser Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 33657 of 121061
Subject: Re: Foreign Trust/Depository & tax saving/defer Date: 4/6/2000 4:16 PM
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I would appreciate a pointer to high integrity books, publications or tax law references on this subject. Please do not respond with hear-say or second hand anecdotes.

"TMF Taxes" once wrote the following but recommended no specific references.

[There are certain foreign trusts that can provide some US tax savings and/or deferral depending upon how they are structured. But this is a very complicated area, one that is well beyond the scope of this message folder. And you certainly would not want to get involved with any foreign trusts without the guidance of a qualified tax attorney.

If you are really interested in this issue, your local bookstore has a number of volumes on this issue that might be a place to start building your knowledge on this subject.]


There are no easy-to-understand ways for normal U.S. residents to defer or avoid taxes on earned income or investment portfolio income using foreign vehicles (trusts, companies, partnerships, etc.) that cannot be done with similar U.S. vehicles(e.g., annuities and variable life insurance). Period. A good number of the books on offshore tax savings available on Amazon or at the local Books-a-Million are mostly, if not completely, junk. They often contain outright lies that are designed to sell books, and will not work to defer or to avoid taxes.

There are ways to defer income on some kinds of foreign investments - if you want to buy a rental house in the Bahamas inside a Bahamian corporation, rent it to unrelated third parties, and accumulate the income inside the corporation, that will defer U.S. income tax on the rental income. Captive insurance companies can have the incidental benefit of allowing deferral on investment income.

There are some very very complex ways to use foreign trusts to defer and possibly to avoid taxes, but not on income that the grantor of the trust will ever see. These structures are means for deferring taxes on income that will be distributed to children, grandchildren and great-grandchildren.

There is a potential way to use combinations of foreign trusts, foreign companies and insurance or annuities to defer capital gains on the disposition of appreciated assets, but again, it's not simple by any stretch of the imagination and the professional fees for these kinds of things are in the $50,000 to $100,000 range with relatively high ongoing fees. It can be worth it for gains of $5 million or more, but not for the average investor.

Most of the nuts and bolts info - or at least what little of that there is - is found by reading specialty professional journals (The Asset Protection Journal, The Journal of Asset Protection, Trusts and Estates, Estate Planning, etc.) and by word-of-mouth.

Chris Riser
criser
criser@mayer-riser.com

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