Before investing offshore, consider a Roth conversion. This expat Roth conversion trick can save the high yield investor big come tax time.
Let’s say you have $1M in a traditional IRA and want to take control over your investments, diversify abroad, and go after a few high yield investments. Here is how a Roth conversion will help.
- This system works for just about any size IRA.
The first step is to set up an offshore IRA LLC that will allow you to move multiple retirement accounts offshore under a single entity.
Next, divide the $1M account into 10 $100K accounts (or as many as you require) and convert them all into Roth IRAs. Then, move them into your offshore IRA LLC. You now have 10 Roth IRA accounts under your control and management under a single offshore RA LLC.
Once the structure and money is in play, select 10 high yield offshore investments that will show significant movement in the next 17 months (before October 15, 2015). Maybe one account will trade currencies, one will invest in foreign growth stocks, another in emerging market debt, one will hold a promising rental property in a down market or that you plan to flip, and so on. Remember, the focus here is high yield foreign investments with one investment from each of your 10 accounts. Don’t mix money between the accounts and keep excellent accounting records!
Now, work the trading accounts and wait to see what happens with the buoy and hold options. When October 15 rolls around (be sure to extend your return from April 15 to October 15!), keep the high returning accounts as Roths and undo those that have lost value.
You have until the due date of your tax return, including extensions, to undo a Roth conversion without penalty or cost.
For example, maybe the rental is appreciating nicely and emerging markets are performing well, buy your currency trading system didn’t keep pace. You might wind up standing pat with, say, $600K of Roth conversions on accounts that have grown to $825K while revoking the remaining $400K in Roth conversions that ha e declined to $375K.
This model of high y8ield Roth conversion is especially powerful offshore. The sophisticated international investor can use leverage and avoid the 35% Unrelated Business Tax that would hit his/her account and Roth conversion if it were in the United States. This is only available offshore.
If you would like more information on taking your IRA offshore, how to use max leverage, or the high yield Roth conversion, please check out my website at www.Premieroffshore.com. Feel free to send me an email to info@premieroffshore.com anytime. Consultations are always free and confidential.