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Author: curanderotk Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75340  
Subject: Investing IRAs Abroad Date: 8/30/2003 8:53 PM
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I asked the question on the "retired fools" discussion board...but, I would like to ask it here.
If an American citizen lives full-time abroad, such as in Mexico or Canada, can he/she transfer thier IRA monies abroad, to a safe tax-
haven, such as the Netherlands, Switzerland, Austria or the Bahamas...?

Thus, letting the IRA conpound and grow abroad, and following the same legal IRA distribution rules...but, since the individual lives abroad, and the monies are subject to the tax laws on foreign investors of the
country in which the money is invested...taxes may then be avoided.I
am not looking for illegal means...but, legal investing routes that ex-pats may use to invest and avoid paying taxes...which are not benefiting them...

I have not read of IRAs being invested abroad, other then thru mutual funds,such as global,international,emerging-markets,or European funds...and these are subject to taxation, since they are American-
based investing tools...as they should be...

If anyone can answer my questions I would appreciate thier input...
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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 37065 of 75340
Subject: Re: Investing IRAs Abroad Date: 8/30/2003 9:08 PM
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Greetings, curanderotk, and welcome. You asked:

If an American citizen lives full-time abroad, such as in Mexico or Canada, can he/she transfer thier IRA monies abroad, to a safe tax-
haven, such as the Netherlands, Switzerland, Austria or the Bahamas...?


No, (s)he cannot do that for a very good reason. By law, an IRA is a trust or custodial account set up in the United States for the exclusive benefit of you or your beneficiaries. The account is created by a written document. The document must show that the account meets a number of requirements. One of these is that the trustee or custodian must be a bank, a federally insured credit union, a savings and loan association, or an entity approved by the IRS to act as trustee or custodian.

You will find these details listed on page 10 of IRS Publication 590 (Individual Retirement Arrangements) available for download at http://www.irs.ustreas.gov/forms_pubs/pubs.html.

Hope that helps.

Regards...Pixy


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Author: curanderotk Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 37066 of 75340
Subject: Re: Investing IRAs Abroad Date: 8/30/2003 9:13 PM
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Pixy...thank you...the funds shall rest where they are...

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Author: Hyperborea Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 37102 of 75340
Subject: Re: Investing IRAs Abroad Date: 9/4/2003 8:05 PM
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If an American citizen lives full-time abroad, such as in Mexico or Canada, can he/she transfer thier IRA monies abroad, to a safe tax-
haven, such as the Netherlands, Switzerland, Austria or the Bahamas...?


Your original question has been answered but you might also want to consider other issues too. Roths can be a troublesome issue for those who live abroad. Many countries don't consider them to be tax deferred investment vehicles and if you are living in say Canada and are a tax resident there then you will owe taxes each and every year on any realized gains in the Roth - that includes sales from within the Roth for distributions. They are completely unsheltered in Canada and many other foreign countries.

You may also want to look into the tax treaties between the US and other countries at - http://www.irs.gov/businesses/corporations/article/0,,id=96739,00.html - and summaries at - http://www.irs.gov/pub/irs-pdf/p901.pdf

If you are specifically considering issues for residing in Canada then I highly recommend the Grasmick board at www.grasmick.com There are two web boards there (financial and visa/immigration) that are mostly dealing with Canucks in the US but there are some intelligent folks who might be able to help you out.

Hyperborea

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