Tax Treatment of Foreign Securities
JacobsReport
on International Financial Planning
The JacobsReport is a free email newsletter that will discuss investment, business, tax and financial planning in an international context. Reports will be issued as the author's work schedule permits, but will usually be issued on a weekly schedule.
Tax Treatment of Foreign Securities

QUESTION: If an individual invests directly in foreign stocks purchased through foreign exchanges (passively), are there any international tax rules that would apply beyond the normal reporting of gain/losses on Sch D?

REPLY: Foreign securities owned directly by a U.S. individual or a pass-though entity (like a U.S. partnership) are subject to the same tax rules as domestic securities. However, special rules apply to foreign mutual funds (PFICs) and controlled foreign corporations (CFC)

Vern
http://www.offshorepress.com/offshoretax/otpfic.htm
http://www.offshorepress.com/cfc-ibc-tax.htm


The comments in this memorandum are not intended to constitute an opinion regarding any specific tax issues because additional tax issues may exist that could affect the tax treatment of the tax issues addressed in this memo. This memorandum does not consider or reach a conclusion with respect to those additional issues and was not written and cannot be used for the purpose of avoiding penalties under code
section 6662(d). For further details see http://www.offshorepress.com/vkjcpa/disclosurerules.htm

Vern Jacobs

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Copyright 2007, Vernon K. Jacobs
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Information in the Jacobs Report is educational in nature and deals with various tax or asset protection laws but not how those laws apply to any specific person or company. Readers should seek advice from a qualified professional for tax, legal or investment advice.
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