Tax due on investments

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Tax due on investments

Post by BogleInvestorLondon » Sat Aug 30, 2014 2:48 pm

Things will change in 30 years from now, but currently, if you were withdrawing money from your investments, how do they know what taxes are due? Does the bank automatically notify the authorities when money comes into your account (if they can see it is from a business like Vanguard)?

What if you set up an account off shore?

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Re: Tax due on investments

Post by livesoft » Sat Aug 30, 2014 3:00 pm

In the US, financial institutions report to the IRS things associated with a tax liability.

I think offshore places are supposed to report to the IRS too for US citizens which is why some foreign financial institutions have stopped providing services to US citizens.
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Re: Tax due on investments

Post by pjstack » Sat Aug 30, 2014 3:04 pm

Vanguard sends you a Form 1099 at the end of the year. They also send copies to the IRS.

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