Foreign National as club member?

Raka maka on

Do any club here have experience with foreign national (non-us citizen person) as a member? What will be operational difficulties like membership dues, distributions, brokerage accounts etc etc? Any special requirement for filing tax forms other than 1065, tax witholdings?
Most of the hedge funds can have foreign nationals as partners, so why not investment clubs?
Any details will be appreciated, Thanks

ira smilovitz on

The reason that hedge clubs can have foreign nationals and investment clubs shouldn't is that hedge funds spend (tens of) thousands of dollars on accounting and tax systems that can handle the requirements of dealing with foreign investors. It isn't possible for bivio to provide these services at the subscription prices offered.

Ira Smilovitz

On Wed, Apr 6, 2016 at 2:04 PM, Raka maka <rakamaka@inbox.com> wrote:

Do any club here have experience with foreign national (non-us citizen person) as a member? What will be operational difficulties like membership dues, distributions, brokerage accounts etc etc? Any special requirement for filing tax forms other than 1065, tax witholdings?
Most of the hedge funds can have foreign nationals as partners, so why not investment clubs?
Any details will be appreciated, Thanks

Mark Johnson on

I am left wondering what extra work is needed for foreign nationals. I have volunteered 17 years doing personal income taxes, and all we ask is that people have a tax ID number. If they don't have a Social Security number, then the ITIN (the government's Individual Tax Identification Number) will do just fine.

What am I overlooking, I ask.

On Apr 6, 2016 1:12 PM, "ira smilovitz" <ira.smilovitz@gmail.com> wrote:

The reason that hedge clubs can have foreign nationals and investment clubs shouldn't is that hedge funds spend (tens of) thousands of dollars on accounting and tax systems that can handle the requirements of dealing with foreign investors. It isn't possible for bivio to provide these services at the subscription prices offered.

Ira Smilovitz

On Wed, Apr 6, 2016 at 2:04 PM, Raka maka <rakamaka@inbox.com> wrote:
Do any club here have experience with foreign national (non-us citizen person) as a member? What will be operational difficulties like membership dues, distributions, brokerage accounts etc etc? Any special requirement for filing tax forms other than 1065, tax witholdings?
Most of the hedge funds can have foreign nationals as partners, so why not investment clubs?
Any details will be appreciated, Thanks

ira smilovitz on

Not all foreign nationals have or can obtain an ITIN. If they are considered non-resident aliens, they could be subject to a mandatory withholding of 30% on some items. In any event, the club treasurer would have to become familiar with the terms of any tax treaty between the US and the home country of the non-resident alien.

As a professional tax preparer with 30+ years experience, I still hesitate before accepting a non-resident alien client.

Ira Smilovitz

On Wed, Apr 6, 2016 at 3:21 PM, Mark Johnson <mr.johnson.1953@gmail.com> wrote:

I am left wondering what extra work is needed for foreign nationals. I have volunteered 17 years doing personal income taxes, and all we ask is that people have a tax ID number. If they don't have a Social Security number, then the ITIN (the government's Individual Tax Identification Number) will do just fine.

What am I overlooking, I ask.

On Apr 6, 2016 1:12 PM, "ira smilovitz" <ira.smilovitz@gmail.com> wrote:
The reason that hedge clubs can have foreign nationals and investment clubs shouldn't is that hedge funds spend (tens of) thousands of dollars on accounting and tax systems that can handle the requirements of dealing with foreign investors. It isn't possible for bivio to provide these services at the subscription prices offered.

Ira Smilovitz

On Wed, Apr 6, 2016 at 2:04 PM, Raka maka <rakamaka@inbox.com> wrote:
Do any club here have experience with foreign national (non-us citizen person) as a member? What will be operational difficulties like membership dues, distributions, brokerage accounts etc etc? Any special requirement for filing tax forms other than 1065, tax witholdings?
Most of the hedge funds can have foreign nationals as partners, so why not investment clubs?
Any details will be appreciated, Thanks

raka maka on

Thanks for replies. Will it be better option for foreign member to give loan to club? rather than becoming member and going through legal hassles.

or is there any better option?

ITIN or W-8 BEN is not big hassle except that person's tax witholding @30% is reported to IRS. Other than that it is very similar to US person member.

-----Original Message-----
From: ira.smilovitz@gmail.com
Sent: Wed, 6 Apr 2016 15:39:40 -0400
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Foreign National as club member?

Not all foreign nationals have or can obtain an ITIN. If they are considered non-resident aliens, they could be subject to a mandatory withholding of 30% on some items. In any event, the club treasurer would have to become familiar with the terms of any tax treaty between the US and the home country of the non-resident alien.

As a professional tax preparer with 30+ years experience, I still hesitate before accepting a non-resident alien client.

Ira Smilovitz

On Wed, Apr 6, 2016 at 3:21 PM, Mark Johnson <mr.johnson.1953@gmail.com> wrote:
I am left wondering what extra work is needed for foreign nationals. I have volunteered 17 years doing personal income taxes, and all we ask is that people have a tax ID number. If they don't have a Social Security number, then the ITIN (the government's Individual Tax Identification Number) will do just fine.

What am I overlooking, I ask.

On Apr 6, 2016 1:12 PM, "ira smilovitz" <ira.smilovitz@gmail.com> wrote:
The reason that hedge clubs can have foreign nationals and investment clubs shouldn't is that hedge funds spend (tens of) thousands of dollars on accounting and tax systems that can handle the requirements of dealing with foreign investors. It isn't possible for bivio to provide these services at the subscription prices offered.

Ira Smilovitz

On Wed, Apr 6, 2016 at 2:04 PM, Raka maka <rakamaka@inbox.com> wrote:
Do any club here have experience with foreign national (non-us citizen person) as a member? What will be operational difficulties like membership dues, distributions, brokerage accounts etc etc? Any special requirement for filing tax forms other than 1065, tax witholdings?
Most of the hedge funds can have foreign nationals as partners, so why not investment clubs?
Any details will be appreciated, Thanks

Free 3D Earth Screensaver

ira smilovitz on

It is a hassle because bivio software isn't designed to track these items. I suspect, but don't know definitively without doing research, that having the foreign member loan money to the club doesn't provide any advantage. The club would still have to create a method for tracking the different transactions for the foreign member.

Ira Smilovitz

On Wed, Apr 6, 2016 at 6:06 PM, raka maka <rakamaka@inbox.com> wrote:

Thanks for replies. Will it be better option for foreign member to give loan to club? rather than becoming member and going through legal hassles.
or is there any better option?
ITIN or W-8 BEN is not big hassle except that person's tax witholding @30% is reported to IRS. Other than that it is very similar to US person member.

-----Original Message-----
From: ira.smilovitz@gmail.com
Sent: Wed, 6 Apr 2016 15:39:40 -0400
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Foreign National as club member?

Not all foreign nationals have or can obtain an ITIN. If they are considered non-resident aliens, they could be subject to a mandatory withholding of 30% on some items. In any event, the club treasurer would have to become familiar with the terms of any tax treaty between the US and the home country of the non-resident alien.

As a professional tax preparer with 30+ years experience, I still hesitate before accepting a non-resident alien client.

Ira Smilovitz

On Wed, Apr 6, 2016 at 3:21 PM, Mark Johnson <mr.johnson.1953@gmail.com> wrote:
I am left wondering what extra work is needed for foreign nationals. I have volunteered 17 years doing personal income taxes, and all we ask is that people have a tax ID number. If they don't have a Social Security number, then the ITIN (the government's Individual Tax Identification Number) will do just fine.

What am I overlooking, I ask.

On Apr 6, 2016 1:12 PM, "ira smilovitz" <ira.smilovitz@gmail.com> wrote:
The reason that hedge clubs can have foreign nationals and investment clubs shouldn't is that hedge funds spend (tens of) thousands of dollars on accounting and tax systems that can handle the requirements of dealing with foreign investors. It isn't possible for bivio to provide these services at the subscription prices offered.

Ira Smilovitz

On Wed, Apr 6, 2016 at 2:04 PM, Raka maka <rakamaka@inbox.com> wrote:
Do any club here have experience with foreign national (non-us citizen person) as a member? What will be operational difficulties like membership dues, distributions, brokerage accounts etc etc? Any special requirement for filing tax forms other than 1065, tax witholdings?
Most of the hedge funds can have foreign nationals as partners, so why not investment clubs?
Any details will be appreciated, Thanks

Free 3D Earth Screensaver
Watch the Earth right on your desktop! Check it out at www.inbox.com/earth

Mike Jones on

After reading all of the possible issues and accounting headaches, I would offer a suggestion. Allow the foreign national to become an 'associate member' and have him/her open a brokerage account at the same location used by the club. Then this member could deposit funds directly to his/her own account and mirror the trades of the actual club to his/her benefit/detriment. That would keep funds separate yet allow the new member to benefit from the social and educational association with the club members while investing regularly.

Mike Jones

Wall$treet Wannabees

Bloomington, MN

From: Raka maka <rakamaka@inbox.com>
To: club_cafe@bivio.com
Sent: Wednesday, April 6, 2016 1:04 PM
Subject: [club_cafe] Foreign National as club member?

A Hinds on

Years ago I was treasurer for a choral society that hired some foreign/non-residents

for a couple of concerts. It was the biggest hassle to pay them: not only the ITIN/SSN problem, but we had to withhold 30% of their earned fees and remit it to the IRS. How this would work for realized gains/dividends when a partner is a foreign national I have no idea. Luckily I was able to get advice from an expert in the foreign student/visitors office at our local university, esp. information on the relevant tax treaties between their countries and the U.S. Otherwise I would have been totally lost at sea.

I'm not a tax expert, but I would advise extreme caution: do some careful research and be sure you know all the rules (esp. tax treaty info) and the club's obligations taxwise before accepting a non-resident club partner.

Andy Hinds

From: ira smilovitz <ira.smilovitz@gmail.com>
To: "club_cafe@bivio.com" <club_cafe@bivio.com>
Sent: Wednesday, April 6, 2016 4:42 PM
Subject: Re: [club_cafe] Foreign National as club member?

Ira Smilovitz

On Wed, Apr 6, 2016 at 6:06 PM, raka maka <rakamaka@inbox.com> wrote:

Thanks for replies. Will it be better option for foreign member to give loan to club? rather than becoming member and going through legal hassles.
or is there any better option?
ITIN or W-8 BEN is not big hassle except that person's tax witholding @30% is reported to IRS. Other than that it is very similar to US person member.

-----Original Message-----
From: ira.smilovitz@gmail.com
Sent: Wed, 6 Apr 2016 15:39:40 -0400
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Foreign National as club member?

Not all foreign nationals have or can obtain an ITIN. If they are considered non-resident aliens, they could be subject to a mandatory withholding of 30% on some items. In any event, the club treasurer would have to become familiar with the terms of any tax treaty between the US and the home country of the non-resident alien.

As a professional tax preparer with 30+ years experience, I still hesitate before accepting a non-resident alien client.

Ira Smilovitz

On Wed, Apr 6, 2016 at 3:21 PM, Mark Johnson <mr.johnson.1953@gmail.com> wrote:
I am left wondering what extra work is needed for foreign nationals. I have volunteered 17 years doing personal income taxes, and all we ask is that people have a tax ID number. If they don't have a Social Security number, then the ITIN (the government's Individual Tax Identification Number) will do just fine.

What am I overlooking, I ask.

On Apr 6, 2016 1:12 PM, "ira smilovitz" <ira.smilovitz@gmail.com> wrote:
The reason that hedge clubs can have foreign nationals and investment clubs shouldn't is that hedge funds spend (tens of) thousands of dollars on accounting and tax systems that can handle the requirements of dealing with foreign investors. It isn't possible for bivio to provide these services at the subscription prices offered.

Ira Smilovitz

On Wed, Apr 6, 2016 at 2:04 PM, Raka maka <rakamaka@inbox.com> wrote:
Do any club here have experience with foreign national (non-us citizen person) as a member? What will be operational difficulties like membership dues, distributions, brokerage accounts etc etc? Any special requirement for filing tax forms other than 1065, tax witholdings?
Most of the hedge funds can have foreign nationals as partners, so why not investment clubs?
Any details will be appreciated, Thanks

Free 3D Earth Screensaver
Watch the Earth right on your desktop! Check it out at www.inbox.com/earth

Mail