Gold: An ideal investment for US Expats

Jul 4, 2022 | Uncategorized | 0 comments

“Gold is money. Everything else is credit. J.P. Morgan

An American or IRS defined ¨US Person¨ living, working, or investing outside the United States is subject to a multitude of IRS reporting demands. The US Internal Revenue Service wants to know exactly what assets these people have and where they are held. Even worse, some of the forms required, such as 5471 for foreign corporations have so many complex schedules and subsections that you may well require a costly CPA to prepare them for you.

Additionally, the United States government has turned foreign bankers in to unpaid IRS agents through Foreign Account Tax Compliance Act, also known as the dreaded ¨FACTA¨. This highly controversial law requires foreign banks with American clients to report each and every transaction to the IRS. The high costs of compliance, and fear of running afoul of FATCA, has caused the majority of banks outside the United States to close their doors to Americans and ¨US Persons¨.

The best way for an American expat or IRS defined US person to avoid this reporting nightmare is to own exclusively assets that do not need to be reported to the IRS. Crucially, these assets must be held in ¨own name¨, rather than any kind of structure or holding company, as any and all offshore corporations, limited liability companies, foundations, or trusts must be reported to the IRS no matter what assets it holds, even if none at all. If you have an offshore structure, you have forms to file.

The following is the list of assets that do not trigger reporting requirements if held in the ¨own name¨ of the IRS defined, non-resident US person:

  1. Physical currency (that is, physical cash not held in a bank or brokerage account)
  2. Foreign Real Estate in the name of the IRS defined ¨US Person¨
  3. Tangible assets for investment, such as art, antiques, jewelry, vintage cars and other collectibles.
  4. Precious metals for investment, such as gold and silver held in the name of the IRS defined ¨US Person¨.  This must be physical gold, not “paper gold”, that is, ETFs or Unit Trusts or shares held in a brokerage account.
  5. In addition, a safe deposit box at a foreign financial institution need not be reported on Form 8938. A safe deposit box is not a foreign asset nor a foreign account. Hold the safe deposit box, or the assets within in an offshore structure, and reporting requirements will be triggered.

Gold is the ultimate alternative asset, offering true wealth protection and attractive returns against all fiat currencies, throughout time, at a much lower volatility and higher liquidity than so called ¨hedge funds¨.  Additionally, IRS rules make gold (held physically in the client´s own name) and ideal investment for IRS defined ¨US Persons”.

The table below demonstrates clearly the superb overall performance of gold year after year vs. the USD that is issued without backing of any kind. The performance of gold runs circles around competing assets such as bonds, bank deposits or annuities. In fact, over the past couple of decades of ever more deeply indebted governments addicted to deficit spending, gold has outperformed even the major stock indexes.

It is impossible to overstate the role of physical gold in preserving wealth throughout over 4000 years of human history, even under the most extreme economic and political conditions.
Furthermore, technological advances now it possible for qualified ¨US person¨ investors to hold allocated physical gold, vaulted in their own name in Switzerland, while enjoying security, liquidity, accessibility, and privacy, along with enjoying the exception from IRS reporting requirements. US Expats or IRS defined ¨US Persons¨ can in this way enjoy the convenience of an investment solution that facilitates economic transactions based directly on transfer of gold, without reliance on the banking system.


*For more detailed information, see:  https://www.irs.gov/businesses/corporations/basic-questions-and-answers-on-form-8938

For additional information, please, email james.levy@goldensuisse.com


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