Longboat Retirement Solutions LLC

Panama Papers Reality Check April 12, 2016

I have heard so much misinformation on offshore accounts and “tax evasion” over the last week, that I felt the need to clarify and give some truths.

Truth number one: The United States taxes its citizens regardless of where the money was made.

Truth number two: It is much harder and much more expensive to open a bank account in a country labeled a tax haven.

Truth number Three: There are reasons other than money laundering and tax evasion to have money in a country other than the United States.

Truth number four: The U.S. government is in bed with the U.S. media.

Truth number five: The U.S. government is filled with rich people.

Truth number six: The U.S. government is also in bed with large corporations.

What to these truths logically lead to:

The U.S. government is telling its citizens, through its media division, that only rich people and terrorists keep money offshore.

This leads us to the lies:

If you have money offshore, you are rich and/or a terrorists.

The only reason people have money offshore is for money laundering or tax evasion.

Of course both of these things are lies. Most people who have money offshore are not either terrorists or fabulously wealthy.

There simply are not terabytes worth of fabulously rich people and terrorists.

The United States and England are the destinations of choice for laundering money and tax evasion.

That is fact; look it up.

So, if you open your eyes to reality and facts, you can easily decipher that the government, through their propaganda arm, are dispensing lies to distract and leverage the current fear and anger of the populace towards the rich people and terrorists to clamp down and take even more freedoms. They will once again get people to beg to take away their freedoms, in the name of “transparency” and “safety”.

Already, I have seen the protests in Europe.  Sad.

If you have ever considered moving some money offshore to real banks, that offer security, diversification, actual interest, and some protection from litigation, you’d better act fast.  It is clear that the big banks want to consolidate all of your money into their crooked institutions.

I guarantee, right now, that there will be investigations, and committees, and other B.S. that creates a new panel, and then new prohibitive laws to restrict money movement.  Currency controls anyone?  Count on it.

 

The Panama Papers April 5, 2016

The Panama Papers. This is an interesting developing story. Many people’s initial reaction will be that of surprise. Frankly, I’m surprised that people are surprised – wait, no I’m not. For anybody in the financial world, this is a Duh moment. Of course rich people are hiding money offshore. These people are either smart, or have smart people working for them who manage their money and know that American and Western European banks (most, not all) are bunk. The banks that most people keep their money in are under capitalized (that means that they don’t have your money). Not only that, but they are under insured for loss (remember the bailouts). These big banks are also corrupt as hell (see 2008).

If I had millions or billions of dollars, I’d keep them offshore as well. In fact, I recommend that everyone have an offshore account in a “tax haven”. These banks in so called tax havens actually pay interest! What a novel idea!

Also, living in an extremely litigious country like the good old US of A, I am forever fighting the statistical probability that I will be sued for offending a field mouse with hateful rhetoric.

Money kept offshore can be made harder to get by the blood sucking lawyers. It is a good insurance policy.

All that being said, I hope that the big dog criminals and politicians get locked up (but I know that will not happen).

CNN, FBN, FOX, CNBC, and The Guardian will all report this story; they will follow it for a few weeks, and then it will fade away.

A few bones will be thrown to the public to chew on.

 

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More Solo 401k Questions May 17, 2015

Part two of the series where I answer questions that people have asked me about Self Directed Retirement Accounts.

Question:  “Can I buy a vacation house in another country with my self directed IRA or Solo 401k?”

Answer:  “Yes, you can, but legally, you cannot use the house for your own benefit.  In other words, the whole point of investment inside of a retirement account is for the benefit of the retirement account….therefore, you could not take a vacation at this house.  Of course the point of your retirement account is for the benefit of you – when you retire.  So, until you retire, you cannot use the vacation house.  I don’t know how anyone would know that you used the house, but regardless, it would not be legal, as far as the IRS is concerned.  I suppose if you went through a nasty divorce and your spouse wanted to stick it to you, they could tell the IRS that you took vacations in the house, and the IRS could look into it.  Another thing to consider is that you cannot do any handyman work on a house that is owned by your retirement account; you need to farm that work out to a contractor.  Again, I don’t know how anyone would know that you fixed a leaking toilet, or patched the roof on your beach house in Nicaragua, but technically, it is not allowed.”

Remember that when I say illegal, it is not a jail time thing, but you could lose more than the value of your account; that’s nothing to sneeze at.

You could buy a condo in Mexico, and rent it through a rental program with a management company, and the money would go into your Solo 401k – tax free.  This money would grow, tax free until you start taking distributions, then the distributions would be taxed at whatever income tax rate you are in at the time.

Alternatively, you could set aside a portion of your account as a Roth, and use those funds to make payments on your condo.  When you retire, you take the condo as a distribution, and since you already paid taxes, you pay none.

I think making an investment in foreign real estate is a great choice for inside a self directed account, but you need to stay within the guidelines.  Investing in emerging markets is exciting, fun, and creates true diversification.  Hell, you might even make some money!

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U.S. GOVERNMENT REPORTING REQUIREMENTS FOR COIN AND BULLION DEALERS February 22, 2013

Filed under: Investing Globally,Precious Metals — larsfforsberg @ 2:55 pm
Tags: , , , , , , , , ,

From Global Wealth Protection of January 22, 2013:

There is much confusion and disinformation about the extent to which coin dealers are required to obtain customer information to keep on file and use in submitting reports to the Internal Revenue Service (IRS) or other government agencies.

In some cases the confusion may be used to steer customers away from lower-margin bullion sales and towards the higher-margin coin sales, even though such items may be less suitable for the customer’s purposes.

I’ll attempt to summarize some of the reporting topics herein, but for more helpful information, you can visit the Industry Council for Tangible Assets’ (ICTA) website.

The three main circumstances where dealers may be required to do extra paperwork or submit reports for compliance with governmental regulations are (1) the receipt of “cash” payments of large enough amounts in one or more related transactions where the dealer must comply with cash reporting regulations; (2) a minimal amount of extra in-house paperwork for purchases or sales above a threshold dollar amount where the affected coin dealer (which includes almost every dealer who handles any bullion-related transactions) must comply with anti-money laundering regulations; and (3) purchases from non-corporate sellers of a limited list of precious metal coins and ingots in large enough quantities that the dealer needs to submit the IRS Form 1099-B.

Cash reporting regulations: There are two elements in the cash reporting regulations. The first and most basic rule is that when someone makes cash payments totaling more than $10,000 in a single or in related transactions, dealers receiving such payments are required to submit Form 8300 Report of Cash Payments Over $10,000 Received in a Trade or Business. Among the tricky parts is that cash includes more than just the Federal Reserve Notes in your wallet. It also includes traveler’s checks, money orders, and bank instruments like cashier’s checks of individual amount of $10,000 or less (bank-originated instruments in excess of $10,000 need not be reported by a dealer because the issuing institution had to already report it to the IRS). Another tricky part has to do with related transactions. If a married couple were to come in to make purchases within a short time frame, paying “cash” (as defined in the IRS regulations), and totaling more than $10,000, the dealer is required to add these transactions together to submit Form 8300 to the IRS. Related transactions can also include multiple transactions by the same person and two or more transactions by people with other family relationships, or even friends or co-workers.

The second part of cash reporting regulations has to do “suspicious activities”. While many financial institutions are required to submit Suspicious Activity Reports (SARs), coin dealers are not yet required to do so. However, coin dealers are encouraged to voluntarily file such reports if any of a variety of situations arises (see http://www.fincen.gov for more information), and it may be prudent for the dealer to do so.

The SAR is submitted to the Treasury Department’s Financial Crimes Enforcement Network on FinCEN Form 109 Suspicious Activity Report by Money Service Businesses. When the government receives a SAR, it is not just filed. Instead, it is effectively a criminal complaint that starts an investigation of the customer. It absolutely would bring on a greater degree of scrutiny of a customer’s financial activities.

Anti-money laundering (AML) regulations: Section 352 of the USA Patriot Act of 2001, for which regulations were adopted during 2002, requires coin dealers to be on the lookout for possible terrorist activities. Any coin dealer who does more than a nominal amount of purchases and sales of “bullion-related” coins and ingots (including most US $20 and $10 gold coins) with the public over the course of a 12 month period is subject to complying with these regulations. This means that the dealer is required to have a formal anti-money laundering compliance program, a designated compliance officer, annual training of all employees who deal with customers, and an annual audit of the dealer’s compliance with the program.

I suspect that there are many coin dealers who have not established their compliance programs, erroneously thinking that they do not meet the threshold amounts of “bullion” transactions. But, once a dealer meets the threshold quantities for becoming subject to these regulations, it pretty much means that the dealer is permanently required to comply with these regulations.

In complying with anti-money laundering regulations, dealers may be required to obtain the name of all customers engaging in cash transactions above a threshold dollar amount, no matter whether they’re buying or selling. I understand that the AML compliance programs of most dealers have a threshold of $3,000 above which they must obtain this customer information. Some dealers will have a higher threshold for reporting due to their higher average purchase and greater volume of transactions.

Dealers do not file any additional forms with any government agency under AML regulations. However, dealers are required to have the information available should an IRS agent come to their premises to check for transactions above the threshold amounts.

IRS Form 1099-B reporting regulations: The IRS proposed regulations in the early 1980s to require coin dealers to report certain purchases from non-corporate sellers. It took nine years for the IRS to finally pin down reporting thresholds. During this time, significant lobbying by ICTA succeeded in eliminating reporting requirements for small transactions (see IRS Revenue Procedure 92-103).

The final regulations come from the perspective of requiring brokers to report stock and commodity transactions, where the broker facilitates a transaction between a seller and buyer but does not take title to the assets. The IRS expanded the definition of a broker to include coin dealers, even those buying and selling from their own inventory and not acting as a broker. However, in establishing regulations from this angle, the result for coin and bullion dealers was that the reporting requirements covered extremely few items, and then only in sizable quantities; only items (of sufficient quantity) that could be potentially deliverable to fulfill commodity contracts on existing or approved exchanges.

Here are the only items listed by the IRS in Rev. Proc. 92-103 as requiring submission for IRS Form 1099-B, and the minimum threshold quantities that must be sold in single or related transactions before the form must be filed:

Item
Minimum Fineness
Minimum Reportable Amount
Gold Bars
0.995
Bars totaling 1 kilogram (32.15 troy oz.) +
Silver Bars
0.999
Bars totaling 1,000 troy oz. or more
Platinum Bars
0.9995
Bars totaling 25 troy oz. or more
Palladium Bars
0.9995
Bars totaling 100 troy oz. or more
1 oz. Gold Maple Leaf 25 1-oz. coins
1 oz. Gold Krugerrand 25 1-oz. coins
1 oz. Gold Mexican Onza 25 1-oz. coins
US 90% Silver Coins Coins totaling $1,000 face value or more

If an item is not on this list, sales of it does not need a Form 1099-B to be filed, no matter how large the quantity!

There is some ambiguity in the regulations whether the ingots are required to be the actual minimum size required for delivery against a commodity contract or whether a mixture of smaller size ingots that total more than the minimum ounces required for a contract are also sufficient to call for submission of Form 1099-B. ICTA has advocated the conservative position of recommending that coin dealers report any mixture of smaller ingots that, combined, meets or exceeds the minimum contract size.

The result of defining reportable transactions so narrowly is that relatively few 1099-B forms ever need to be submitted. If someone sells to a dealer 20 Krugerrands, 10 Gold Maple Leafs, $500.00 face value of US 90% Silver Coin, and 700 ounces of pure Silver Ingots, the dealer does not need to submit any paperwork to the IRS. The IRS still wants to see the transaction on the seller’s tax return, but it is the seller’s responsibility to collect and report this information.

There are many bullion-priced products available that are not reportable on Form 1099-B. Beware of a coin dealer who tries to steer a customer away from all bullion coins and ingots and into numismatic coins because “you can avoid government reports when you sell” is either dishonest, incompetent, or both.

Financial privacy from the US government has largely disappeared. While it troubles me to think that our freedoms and privacy are evaporating, that is pretty much the environment we face today. At least precious metals buyers are not subject to more invasive reporting requirements as imposed in other countries.

Buying these commodities in another country is generally legal but some dealers may be required to obtain your ID as reporting requirements may apply to local citizens but not with foreigners. So, verifying your ID will help to eliminate you as one subject to local taxation.