Up to 5 million international investors invest in the U.S. annually (on a non-immigrant basis).International “jet-set” investors may legally invest annually in the U.S. without paying U.S. income, estate, or gift tax on either their U.S.income (assets) or world-wide income (assets). If the international “jet-set” investors are physically present in the U.S. for less than 183 days in one year,less than 122 days per year over three consecutive years, under the “substantial presence test” they are not classified as U.S. taxpayers, and not subject to U.S. tax on their income (or assets) as long as they do not have a U.S. “green card” (or U.S. domicile). For tax-planning, the investor should form an offshore trust (or private foundation) to own their U.S. investments.
If the international “jet set” investors have a “green card”, or are in the U.S. for 183 days in one year or 122 days per year over three consecutive tax years, they are subject to U.S. income tax on both their U.S. and world-wide income. If the investor moves their “domicile” to the U.S. (i.e. their permanent home) they are subject to U.S. estate and gift tax on their U.S. and world-wide assets. Under these tax scenarios the international investor may still exempt their world-wide income, and assets, from U.S. income, estate and gift tax if their investments (world-wide) are owned under an international life insurance policy (owned by an “offshore trust” or “private foundation”).
If you have any questions regarding international investments please call me for a free consultation at 323-782-9139.