Investing in US domiciled Stocks

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one_moment
Posts: 3
Joined: Thu Jun 06, 2019 1:50 am

Investing in US domiciled Stocks

Post by one_moment » Wed Jun 12, 2019 2:11 am

Greetings all,

so, im investing through IB for a long time in the usual irish ETFs to be more efficient with the taxes deductions and of course move away from the trouble of estate laws in the US.

now the thing is, i have done a lot of research and i made an small portfolio with US stocks that are mostly value/dividend based. the total dividend is still higher than the average ucits etf after 30% US tax deduction. now my question is if someone have good information about US tax, if my position was open lets say for couple of years 5-10 years and than closed. will this effect my portfolio ? in relation to the estate laws. what i mean if positions are closed and gains are realised.

from what i understood estate laws go on force in the account holder is deceased and in the account US domociled stocks are in position and not closed yet , is this right ?

Regards

TedSwippet
Posts: 2224
Joined: Mon Jun 04, 2007 4:19 pm

Re: Investing in US domiciled Stocks

Post by TedSwippet » Wed Jun 12, 2019 2:42 am

one_moment wrote:
Wed Jun 12, 2019 2:11 am
from what i understood estate laws go on force in the account holder is deceased and in the account US domociled stocks are in position and not closed yet , is this right ?
Almost right. Under threat from US estate taxes are: any holdings in US stocks, including US domiciled ETFs; and any cash holdings in US brokers. So you would be safe as long as either (a) your broker is not US based, or (b) if it is, you have transferred the cash out of the broker directly after selling the stocks.

The problem, of course, is the risk of dying unexpectedly during the 5-10 year period you hold these stocks. Your heirs will curse you at your funeral if a component of your bequest to them is a large and unnecessary US tax liability. If you want to do this completely safely, maybe consider putting some form of holding company between you and the US stocks you want to own.

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