Using a SA to receive income from my US business

[OTTFOG]

I could have sworn that this thread was about using an SA to avoid taxes…

It never ceases to amaze me how some people on this forum use any excuse to jump on Bush and the US. If you haven’t left the US already, please renounce your citizenship and hit the road to happiness as soon as possible…

Then, Maravilla, you won’t even have to worry about paying U.S. Taxes. Of course you will have to give up the “bennies” of being a citizen of that horrible country…

Since we are quoting songs, here is Jimmy Buffet: “Expatriated American feelin’ so all alone Telling themselves the same lies that they told themselves back home…

[DavidCMurray]

I’m pretty sure that you cannot avoid paying U.S. taxes that are otherwise due just by renouncing your citizenship. Citizens of other countries who owe U.S. taxes are required to pay them, so why should former U.S. citizens not be similarly liable? Were this not true, there’d be long lines of expats at every embassy.

And, for as long as we’ve drifted off into semi- (or less) relevant song lyrics, here’s an old favorite:

“When correctly viewed,
everything is lewd.
I could tell you things about Peter Pan
and the Wizzard of Oz, who’s a dirty old man.”

Tom Lehr, “Smut”, c 1960.

[happygirl]

….and all these words from a hippy Canadian! I would be insulted if an American had written those words about our PM (even if they were right). I don’t think he has any business sticking his nose in another countries’ politics! By the way we do have an American coming here and telling us what to do – his name is Al Gore.

[newmoon]

Oooo Kaaaaaay. So, now that we’ve all gotten that out of our system… I’ll repeat the question:

Has anyone had any experience paying a CR Corporaton that they own, money from their own US business as a way of (I suppose I should stress this– LEGALLY and PERMISSABLY) extracting profits before taxes in order to finance the purchase of a home in CR?

[OTTFOG]

Newmoon,

To claim a deduction for a business expense here in the US, you must be able to show that the expense was both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary. So, if you are trying to do something that is LEGAL and PERMISSABLE, the consulting or management that the Costa Rican company is doing for your US based business must be ordinary and necessary. Here is a good test. If a reputable and otherwise worthy Costa Rican company that you don’t own offered to do the consulting or management for your US Business, instead of you paying YOUR company to do it, would you hire them instead? If the little voice in your head said, “of course not,” then you are going to have to make payments to your Costa Rican company and carefully document them so that they appear to be ordinary and necessary in case you have to justify them. If you would like to have a private discussion about this topic, please feel free to email me at jdtj777@yahoo.com. We are moving to Costa Rica in December and I WILL be doing business in both places and feel very comfortable about the structure that I have in place to do so.

Sincerely,

Jerry

[Author]

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