Tax Havens

Let's suppose Bob is a British guy who is living in the USA. He opens a brokerage account in the USA and invests $10k in a Microcap company which ten-bags. He wants to bank the profit, but realizes he is going to be taxed 30% by federal withholding as a non-US citizen and then additional state tax.

He is not happy about this. How can Bob avoid paying such high taxes on his capital gains?

As capital gains tax is only paid when liquidating assets, could Bob transfer the shares to a different brokerage (e.g. in a different country) and liquidate them there? Would that be legal?

Could Bob request the shares to be materialized then physically take them out of the country?

What legal options does Bob have?

If you **** with uncle sam, uncle sam's gonna **** with you...

Exception: You hold either a) A high office in the federal goverenment, or b) Wealth in excess of $1,000,000,000

Additionally, if you take legal advice from an online forum you are well deserved of being ****ed by uncle sam.

Bob is not interested in messing with uncle sam. Bob is looking for legal and intelligent ways to minimize his tax liabilities.

There is a crude oil and gas Unit Investment Trust, Whiting USA Trust I (WHX) which is paying a dividend of 18.38% currently...

However, that dividend is actually considered a payment of principal and interest. It is treated by the IRS like a loan where a portion of the payment is non-taxable repayment of principal and only the interest portion of that dividend payment is taxable!

Here are the tax particulars on that which are quite complex...
http://www.businesswire.com/portal/...st_I/Whiting_USA_Trust_I_Tax_Booklet_2011.pdf

Also be aware this trust "zero's out" at the end of its life in several years (repayment of principal), so read all about it before investing...
Whiting USA Trust I | Business Wire

Then there are other crude oil and gas trusts for which you can take a "depletion" allowance if the oil company sets up the trust in that manner. That is... An oil well has a limited life before it runs dry, and thus is depleted. For that search google.com for the words...

IRS depletion allowance oil gas

Note that with WHX, you own only the "profits" from the oil/gas wells and not the wells themselves. So no depletion deduction. With other trusts, you might own the wells themselves. So then could use the depletion deduction.

Basically you need to read all the fine print on these trusts. It gets complicated!

Then I sold some inherited real estate at a short term capital loss. My CPA told me I could roll over those short term capital losses to offset next years short term capital gains! Anyway might check out some real estate funds or trusts which are taking a beating on forclosures. I don't know if any of that could used by shareholders or not? Might be worth a peek.

More on oil and gas...
Oil: A Big Investment With Big Tax Breaks