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Not to mention pfic rules making simple index investing impossible.
by CalRobert 1y ago
Not to mention pfic rules making simple index investing impossible.
- jwr 1y agoDoes that affect individuals investing in ETFs through a brokerage account? I thought you only needed to provide information on the total value of each brokerage account?
- CalRobert 1y agoYes it does, basically all foreign etf’s are PFICs.
- jwr 1y agoOh this is even more terrible than I thought :-/ This means lots of additional reporting work plus 49€ per ETF yearly for tax preparers. US really hates expats.
- CalRobert 1y agoIt's not just the filing, the tax burden is heavy and complicated. You need to opt for one of three regimes, etc. https://accountinginsights.org/how-does-pfic-taxation-work-for-u-s-investors/ https://accountinginsights.org/how-does-pfic-taxation-work-f... I live in Europe and contemplated writing a tool to analyze ETF holdings and buy the stocks individually with the IBKR API, but it's an expensive and error-prone approach.
- jwr 1y agoThere is also an amusing (?) catch-22: you could theoretically sign up with a US-based broker and buy through them, which would make you exempt from these requirements. But most US-based brokers and banks will not want you as a customer if you don't have a US address. And those that do (Charles Schwab International) will not sell you ETFs, because… you are "based" in the EU, which has information requirements for selling financial instruments, and US ETFs cannot be sold to consumers in the EU. I can't believe how badly the US screws their expats, and nothing is done about this, it only gets worse over the years.
- CalRobert 1y agoThe shocked pikachu face at increases in people renouncing (despite them charging you $2300 for it) is really something.