Tag Archives: offshore trust

Provocative International Tax Accounting and Planning News for Small Business

Forget the Trump tax reform with a 20$% corporate tax rate because a new Government Report show business how to get a 14% tax rate, now.  Here’s what’s going on.    

International tax planning and strategy

Applying for an IRS ruling on your international tax planning will save you taxes in the long run.

Fantastic IRS International Gift Tax Plans with this IRS internal letter on this link. Fantastic legal tax avoidance for the foreign person with family in the U.S. is explained in this letter.

Amazing IRS Avoidance of  state income taxes  with this new IRS  designer  Nevada trust.  IRS tells how to use your Nevada corporation as your trustee to legally stop paying state taxes on your investment income. Here’s what’s happeningon this link.   

New- Department of the Treasury letter to the U.K. tax authorities on U.S.  tax planning for UK and EU companies.  Here is the letter from the U.S. to the U.K. 

Be an IRS tax wizard with our new custom Google search, on this link.  This custom Google app to read 300,000 pages deep inside the IRS’s website and the tax court’s website and it is free!.  Find the answers to your tax question quickly and accurately.

18th Century Supreme Court case destroys IRS tax penalty law. Using this case, the Tax Court gave the IRS a significant defeat.  Here is what happen.   The Supreme Court is the “Law of the Land.”  It rules over the IRS and Congress.   

It works both ways.  The blog on this link explains the most missed Supreme Court Doctrine used by the IRS to blow up this offshore plan.

offshore trust, foreign trust, nevada trust, estate planning trust, esbt,

Since the Middle Ages, the wealthy have capitalized on trusts to avoid paying taxes. During the Great Crusades, upon the death of a knight, his entire estate went to the king.    Nine hundred years later, things have not changed much except the ‘King” takes only half.

Trusts are the most efficient tax tool. International tax planning should start with a Nevada trust to own the foreign company.  Learn trust tax planning and asset protection in this easy to read blog post.    It has the blueprint for successful trust tax planning.   IRS memo on asset protection and tax planning with an offshore trust.  Get it now on this blog post.

internet tax planning, saving taxes, cloud tax planning

Saving taxes with the offshore cloud computer. 

Cloud tax planning. Learn how businesses are using the cloud to avoid taxes on this link. 

E-commerce companies are avoiding state income taxes and in some cases deferring U.S. taxes.

Here is how it works.  A computer service that can provide a service (such as a tax research program) or a product (such as music, e-books, video) has special sourcing rules.  The income can be foreign source income when the computer server in a foreign country. 

Is the U.S. a tax haven for citizens of the UK, Sweden, Belgium, Canada, Luxembourg, and Austria?  Yes, says the IRS in its Publication.  Learn the magic Tax Treaty words for these lucky citizens of The UK, Sweden, Belgium, Canada, Luxembourg, Austria on this link.

Treasury Department Leads the Way in Saving Taxes and Protecting Assets with a Foreign Trust

saving taxes, how to save taxes, tax planning,

Saving taxes by requesting a private letter ruling from the IRS National Office.

At the end of last century, the Department of the Treasury led the way in making foreign trust attractive.  The IRS issued a legal memorandum providing the blueprint for protecting assets and saving taxes. 

Nevada  provides unique asset protection for these trusts.  A new IRS regulation allows the Nevada trust to be classified as a foreign trust. 

The tax advantage of a foreign trust is its classification as a “grantor trust.”  This tax plan uses a special asset protection section of the tax code, section 679.

Unlike a domestic trust, all assets transferred to a foreign trust are allowed “grantor trust” status (with one tax planning exception explained below).  They are also excluded from the taxable estate of the settlor.

As a “grantor trust,” the tax law allows the transfers of assets to the trust to be income tax-free.  Thus, you can do what you want to protect your assets and reduce estate taxes without worrying about income taxation.  

This IRS blueprint on foreign trust tax planning is the explained in this episode of my radio show, Tax Talk below.

The play time is about 22 minutes.  Or, If you would like to brainstorm your tax planning, then please call me, Brian Dooley CPA, at 949-939-3414 for a consultation.

If you want to defer income taxes, then fund the foreign trust with a loan due within five years.  Such a loan is called a “qualified obligation.”  This makes the trust a tax deferral vehicle.  The tax deferral can last for more than a century.  This type of a trust is named “non-grantor foreign trust.” 

The IRS Form 3520-A (filed by the trustee) details the tax planning structure for a tax-deferred foreign trust.  You will want to use the “qualified obligation” found on page 3 of the Form 3520 (filed by the settlor).   

Learn the basics on offshore trust on this short video.  Be an expert with my easy to read book, International Taxation in America, available at Amazon.

Saving Taxes with the Five Strategies of the Very Rich

offshore tax, self-directed ira, Mitt Romney tax strategy

photo credit: Gage Skidmore CC 2.0

The Very Rich do not worry about year-end tax planning.  They have strategies that last years.

We’ve heard about Mitt Romney’s owning offshore funds with his self-directed IRA.  It controls a variety of offshore company (learn more here).

We have heard about the success of the Clinton Foundation. Charitable foundations have been used by the Very Rich for decades.   They work best with a shell company formed in Delaware.

Here are the five top tax saving strategies of the Very Wealthy.

  • Self-directed IRA or self-directed Solo 401K to own leveraged real estate or offshore companies.  Learn why the Solo 401K is like your own min tax haven on this link.
  • Foreign businesses owned by offshore  foreign tax haven trust. Back in 1996, Congress passed a special tax law for estate planning foreign trusts.  You can learn more on this link.
  • Offshore contract manufacturing company. This company imports to your U.S. business and saves you taxes on the manufacturing profit.  Learn how here.
  • Captive insurance company used to insure your business for that hurricane, earthquake, or other disaster. A new tax law allows the company to earn $2.4 tax free (each year and every year).  Learn how they make money and avoid taxes with this video at Amazon.
  • Charitable foundations are used to park profits, to legally buy off politicians and avoid estate taxes.

How much does tax planning cost?  Nothing!  The tax savings are many many times more than the setup costs and the maintenance.  A recent Congressional report showed that tax planning business are in a 14% tax bracket (on this link).

If you would like to talk about your tax planning needs, then please call me, Brian Dooley, CPA, MBT, at 949-939-3414.  The sooner you call the sooner you will reduce your taxes. 

 

 

Using Foreign Offshore Trusts to Hold Business and Investment Assets

Save taxes and protect assets by using a foreign offshore trust. Nat King Cole was the first famous American to teach the IRS Americans legally avoid taxes.

Save taxes and protect assets by using a foreign offshore trust. Nat King Cole was the first famous American to teach the IRS Americans legally avoid taxes.

If you believe your heirs are not capable of managing your assets, then a foreign trust should be considered.  Beginning in the 1970’s, wealthy Americans have used offshore trusts for their international tax planning and estate tax planning.

Beginning in the 1970’s, wealthy Americans have used offshore trusts for their international tax planning and estate tax planning.

In some cases, the foreign trust is used merely to avoid state income taxes.  The design of the trusts determines its tax profile.  For example, Nat King Cole legally avoided income taxes (both Federal and state, California) and estate taxes.

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Using Foreign Trust to Protect Your Assets and Avoid Taxes

offshore trust, foreign trust, nevada trust, estate planning trust, esbt,Way before trusts was a key vehicle for estate and income tax planning; trusts protect assets. When I say “Way before…”, I mean a 1,000 years before. Trusts started with the Great Crusades (there was more than one Crusade, and they last for almost three centuries).

Despite their importance, the tax code does not define a trust. The IRS has a hint of a definition in a regulation.

This regulation defines the term “trust” an “arrangement” whereby trustees take title to property for the purpose of protecting or conserving it for beneficiaries under the ordinary rules applied in chancery or probate courts.

So, let us stop here with the words “take title to property.” A nominee takes title of ownership and is not a trustee. You can learn how to save taxes with a nominee arrangement on this link.

America has trusts because our mother country is England. Trusts were “invented” during the Great Crusades. Knights went off to the Middle East. If they returned, it was after many years. If you died, the King took all your land to distributed it to another knight or lord. To protect the wife and children, the knight would place the title of the land in the name of his best friend. Often the King would not know that the knight died because he did not return.

Court cases decided the duties of his best friend over the last ten centuries.

Under IRS regulations, the classification of an arrangement as a trust is resolved by examining whether the arrangement protects assets under the law of equity for beneficiaries. As you can see, protecting assets is a key part of a trust.

All trusts can protect assets for everyone except for the settlor. When the settlor includes himself as a beneficiary, the trust is called a self-settled trust. A few states and a few countries have a law that allows a self-settled trust asset protection to the settlor.

IRS CONCERN ABOUT FOREIGN TRUSTS. THEY JUST AREN’T SURE WHY.

While the trust is a well-recognized estate-planning creature of the legal system, the IRS has expressed its concern about trust arrangements that abuse the tax regime. The IRS fears that some trust arrangements are not acceptable and they avoid taxes. The IRS collects information on Form 3520-A. This form tells the IRS nothing.

Oh yes, the IRS knows that the Form is useless. The American Institute of CPAs sent the IRS a long letter with suggested improvements. The IRS promptly put the letter in the “circular file” aka trash can.

INTENT OF CONGRESS — IS TO  ALLOW FOREIGN  TRUSTS

While the IRS has concerns about the misuse of trusts, and in particular foreign trusts, Congress responded in 1974 and 1976 by deciding, essentially, that foreign trusts will not be prohibited.
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