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Strategies & Market Trends : ABC's of Offshore Investing and Asset Protection
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To: QuietWon who wrote (7)3/16/1999 12:56:00 PM
From: Philip S. LaMar Jr., J.D.   of 11
 
Dear Quiet Won,

I am not sure if I am replying in the correct location, but I will try to comment on some of what is on that particular post.

1-- Shorting with offshore accounts is legal.

2-- There is nothing inherently illegal about having an account in a foreign jurisdiction-- but if you sign on it, you have to let the IRS know. What is illegal is being an American citizen with an offshore account and failing to report it. American citizens are taxed on their worldwide income and they are required to disclose accounts over which they have signatory authority.

3-- Indeed outgoing and incoming transfers of money can trigger taxable events. In the case of money being transferred out, there are withholding taxes. Money coming back in can be treated as ordinary income and taxed accordingly.

Exceptions to this include loans between parties conducting business at arm's length, payment for services, insurance, annuities scholarships etc.

4-- Finally, note that the SEC grants itself worldwide authority in matters that effect American investors. The SEC is particularly sensitive about offshore offerings that reach Americans but that have not been properly registered and do not fit under the Reg. S exemption.

I did not want to venture beyond my area, but maybe someone else out there can contribute.

Philip

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