ahhrunforthehills wrote:
It depends (disclaimer: I am not an accountant). But from my understanding, you would need to report a swiss bank account. But if it was a safety deposit box that had an asset in it... maybe not.
This is very tricky now. According to statements from the IRS in Q&A on the FBAR an account holding gold metal is a reportable account.
The question is this: Do you want to be the test case?
If not, then file the FBAR.
Keep in mind that if you are an American, you are not really eligible to open a swiss bank account. Those banks no longer want your business. You will likely find that they will turn you away b/c they do not want to deal with the US State Department b/c of you. Times have changed.
They will do it, but you need to use a registered intermediary now. The intermediary will be the qualified reporting agent to the IRS for the transactions you conduct. So in essence the bank is insulated from you by having the intermediary handle the paperwork. But other than that, they probably don't want you.
The problem with FBAR is that if there is ever another executive order that makes private gold ownership illegal... they definitely know who you are. Another possible scenario could be if currency controls are in place from a seriously bad economy. If you attempted to leave the country they could consider you a tax dodger and force you to pay exit taxes on your global net worth. They could also impose a 90% capital gain tax on foreign investments since you are "unamerican" or "unpatriotic"
Of course these are all possible. But the other option is to leave all of your assets in the country which in other places in history has proven to be a bad idea. With some money outside the country you have options. With all of assets in country you can have your wealth frozen very quickly in any blanket action.
Who cares if they label it "unpatriotic". Just stall as long as you can and let the situation play out. With any luck, you'll miss the fall of the axe.
It is pretty impossible to export your wealth, at a later time leave the country, pick up your wealth, and go to another country. Unless you are talking $50, I am pretty sure you will break at least 2 laws in there somewhere. Personally, I think you are better off hiding it under a tree in your backyard.
It is hard to export your wealth during an emergency. It is not hard to export your wealth when there is no emergency. Just like other supplies, you don't want to implement your plan when the hurricane is raging. You want the food, water and generator well before then. Likewise, putting money overseas is not that hard. It will however be very hard if the government is making a grab for domestic assets as they have done in places like Argentina as recently as 2008 and other countries in history.
Swiss Bank accounts (or more strategically foreign trusts, foreign life insurance policies, etc.) will drain away all of your profits. You have to understand that you will ultimately still be responsible for your tax obligations, but your expense ratios will be astronomical (and so will be the expenses to keep the structure set up). You don't get "admiral shares" in an account in Liechtenstein. You get 2% expense ratios.
Sadly, Zurcher Kantonal Bank use to offer allocated gold storage for well under 1% a year (0.55% if I recall). Which was very affordable. They no longer do this for Americans, but will for other nationalities. Swiss banks are not expensive if you use the most basic products and do not go in trading your account or use money managers.
Consider then that a Gold ETF is around 0.5% a year expense ratio. Anything you pay over this then is additional insurance costs. So someone charging 1% a year for overseas allocated storage is basically charging you the basic rate an ETF would charge, plus additional for the added protection of geographic diversification. How much you want to pay over the base 0.5% a year ETF fee is dependent on what you want.
The easiest way is unallocated gold with the Perth and not to move it around a lot. That way you MIGHT be able to argue with the IRS that you considered it an asset and not a Financial Account. But that is a big MIGHT. I talked to several CPAs. They are all pretty split on it.
If it is an account you have signature authority over to trade and access the assets it almost certainly is reportable. An account where you shoved a bunch of gold into a safe deposit box is gray area. Again though, it's about being the test case in tax court where you are guilty until proven innocent. Be careful.
Here is a final thing to think about when it comes to keeping your money overseas. Let's say that you do manage to have a reunion with your foreign money after America is in shambles. Would you dare come back? Obviously Uncle Sam would want a pretty big chunk of that cash at that point. But that fact remains, as a US Citizen you are required to pay taxes on the worldwide wealth.
Again having money overseas protects against localized disasters to the banking system here that could be natural or manmade. Also there is a benefit to being able to drag your feet during a financial emergency here and tie things up with cross jurisdiction legal challenges. In any currency crisis I've seen it has been a huge advantage simply to stall as long as possible before repatriating assets into the home currency. Even getting as much as 30 days could be the difference it takes.
So how about if you renounce that citizenship? It is my understanding that if you are determined to have expatriated for financial reasons, the US will not grant you a visa to re-enter. Not even to visit your family for Christmas. You are basically disowned.
There is a difference between having assets overseas and dodging taxes. If the government is making it illegal to move any money outside of the country then I humbly submit it's probably time to get the hell out of dodge because that kind of thing usually ends very badly.
But the above is all the extreme. I submit that there are very good reasons for geographic diversification that fall outside of the end of the world. Simple earthquakes that take down the financial sector, massive terrorist incidents, wide scale cyber attacks, etc. These are all serious reasons to not keep all your money in one place on the planet in addition to simple government attempts at theft.
