JimGant

https://www.morningstar.com/stocks/why-weve-downgraded-fidelity-contrafund Good find. Something to consider in your overall evaluation of whether or not to invest in Contrafund.

Been a good year for US stocks, particularly compared to last year. Now, I've never been smart enough to invest in individual stocks -- figured the insiders have already queered the package. But, years ago, in researching where to put my IRA tax deferred inputs, the reports on an actively managed fund, Contrafund, caught my attention. Hence, that's where I went. Nice choice, as it turned out; haven't quite made the million mark, per the link, below, due to RMDs, but close. And, of course, 'past is not prologue,' so maybe Contrafund's magic is burned up. Nevertheless, if you're stuck with an under performing mutual fund, maybe a look at this article is warranted: https://pictureperfectportfolios.com/fidelity-contrafund-fcntx-review-actively-managed-mutual-fund/

Yes, US citizens are taxed on worldwide income, and thus are treated as if they're residents of the US (and, yeah, file Form 1040, same as a real US resident). But, if they live here in Thailand for over 180 days, they're tax residents of Thailand, as far as the DTA is concerned. And this gives Thailand 'first dibs' on certain income -- but such income is still subject to US taxation, per the saving clause -- with credits avoiding double taxation. As far as the Form 2555 is concerned, this deals only with foreign earned income. It has nothing to do with how US income is dealt with by the Thais, per the DTA, which is what all these latest threads are about. Sure, it's nice to know, if you work full time here in Thailand, how to avoid declaring your Thai income on your US tax return (Form 2555). But that's not what this discussion is about.

....'cause the Swiss tax US IRAs as income, not as REMITTED ONLY income. Wait 'til Thailand does away with the remittance aspect, then you'll see that the US tax treaty with Thailand, and with Switzerland, are near identical -- and definitely identical in how IRAs are treated. Guavaman has done an excellent presentation on how this works. Suggest you re-read.

Not up to Thailand for this determination. If Thailand has "exclusive" taxation rights per the DTA on certain incomes, like private pensions and IRAs (which "only may be taxed in the country of residence"), then they get to keep all the taxes they collect under their tax rules. Only the US, in this example, determines whether or not to allow a tax credit in order to eliminate double taxation; but of course the US only realizes any taxes collected, if the US tax bill exceeds the allowed credits. And the only reason the US can tax this income, which is the exclusive taxation right of Thailand, is because of the saving clause, which says, the US may tax all incomes as if the DTA didn't exist -- with a few exceptions, like alimony and child support. But, the DTA is not the sole reason double taxation is avoided -- the US Revenue Code has always allowed tax credits to avoid double taxation; but, it's only for foreign taxes on foreign income -- not foreign taxes on US income subject to Thai taxes. But, because of the DTA, the Revenue Code can be trumped, to allow credits for Thai taxes on US income. The kicker here is that a Form 8833 needs to submitted with your US tax filing, explaining how the DTA overrides the Code. Hey, I'm not making this sh**** up.

Nice round figure. So, my income is Air Force pension (not assessable, per DTA), Social Security (not assessable, per DTA), and a required minimum distribution from my IRA, last year being $11000 -- which is assessable, per DTA. BUT, when netted against my allowance/deduction/exemption of $15000 (500k baht), I have a Taxable Income of negative $4000, i.e, I have no taxable income thus should not be required to file a Thai tax return. Several takes on this, but the 'no need to file' makes the most sense. Some say they're redesigning the tax return to be able to list tax credits. That's nice. But if you have no income from which to take tax credits from -- why would you list tax credits? Anyway, I'll just be glad I have an LTR visa as insurance against idiocy in the Thai Revenue Department, however that might develop....

Well, yes. But you better have shut down the account by Dec 31st 2023 -- or newer deposits will queer the pot, since there are no accounting rules, to my knowledge, that dictate FIFO or LIFO for remittances; under GAAP, this is for inventory accounting.

Yes, indeed. I'm looking at where things are headed post Jan 1 2024. And, actually, where things might go, should Thailand wise up, and forget the remittance fiasco. In which case, a simple, ah, you cashed out $10000 from your IRA, subject to ordinary taxation, and subject, first, to Thai taxation. All easily identifiable. But, if the remittance rule remains, if you put your IRA distribution into your checking or savings account, mixed with other deposits, say, from military retirement and social security -- and you do a wire transfer to Thailand -- how do you decipher which money was sent, from among the various deposits mixed into a fungible pile of money? You can't. Hence, we're back to the unsolvable problem Thailand will have on sorting out remittance streams for taxability. Stay tuned.

Actually, under the DTA, Thailand has exclusive taxation rights on IRAs, which the language "shall be taxable only in that State" means: Now, there is no "exclusivity" in US DTAs, due to the saving clause, that allows the US to tax all global income as if the DTA did not exist. But, with such wording that makes Thailand exclusive taxing authority, the US becomes secondary taxing authority with its saving clause. And, as such, it has to absorb the tax credit from Thailand, and Thailand gets to keep the entire tax proceeds. Thus, there is no US tax credit against Thai taxes -- only a Thai tax credit against US taxes. So, unless the Thai taxes are greater than the US taxes on the IRA distribution, your overall tax bill will be the same as if your IRA wasn't taxed by Thailand.

Possibly. I don't think that's their intention, but the US international Tax Treaties appear to apply based on residence. So tax free retirement vehicles in the US suddenly are not tax free if living in Thailand. That's not unusual as it seems to be the same for other countries treaties with the US for their retirement accounts. The OECD and UN Model intent is shown in the US-UK DTA, note this quote from the Technical Explanation: The US-Thai DTA was written before this OECD/UN Model sentiment, so such language isn't found in that DTA; but the later written US-UK DTA *did* incorporate such language. Now, Tax Treaties can be modified with with "exchange of notes" and "protocols." No doubt a lengthy ordeal, so, I guess, the Thais could tax your Roth during the years needed to change the treaty. Not too sure I'd worry about this wrinkle -- I'd just not declare my Roth distribution --knowing the current OECD sentiment -- along with non declaration of my Air Force pension and other non assessable income, per DTA.

Pretty stupid response. Backing out, you're heading into the wide expanse of the non-parking apron; not a lot of poles and adjacent cars to maneuver around. The best parking design is the angled parking slots, where it's even easier to back out than from a square one. Not sure why we don't see more of those, 'tho I guess it does reduce available parking slots by one.

What's the parking situation now? By the way, is it mandatory in Thailand to back into these square parking slots? Never had to do that back home, thus my reverse-into-a-tight-spot skills suck.

My read is that the Form 8833 would be required, if you filed the Form 1116, where you would check the box, "Income resourced by treaty." Doing so begs for a Form 8833. If I ever have to do this, I'd probably be below $600 in Thai taxes as a credit, which (filing jointly) means no Form 1116 required -- only a single line item entry on Schedule 3, Form 1040. If I had to file a Form 1116, with the Form 8833, I couldn't file electronically (at least with TurboTax). But, I love filing electronically, so I would; I'd just mail the Form 8833 separately, with an explanation (this avenue is not advertised, but you can mail a Form 8833 by itself, if you have no tax obligation but are taking advantage of a tax credit). The following link is a good description of how a DTA treats an IRA. Just replace "Switzerland" with "Thailand" -- and you have a good picture of how things may become.

Strictly speaking, if the DTA says Thailand has primary taxing rights on said income, then they can tax it -- and as primary taxing authority, they get to keep all the tax collection but provide a credit to the home country's taxation. Of course, if you've already paid full up tax to your home country, you'd either have to file an amended return, or carry the credit over to the next year (at least under US tax guidance). Pretty messy and involved. I like the original posts to all these threads that said, "If you have a DTA and you pay taxes in your home country, Thailand will leave you alone." But, I guess we never saw anything official along those lines. But that would be nice and simple, at least for those of us that do pay taxes in our home country.

Well, yeah. But we're talking about remittances made post Jan 1, 2024 from a pot of money established pre-Jan 1, 2024. Ergo, certainly not remitted in year earned.

Or just prevent any new inputs to that savings or checking account that you were filtering your remittances through. And open a new one for post Dec 31st inputs. Then, just remit from that old account, which you could clearly show only held pre 2024 inputs. Again, under this new rule about pre 2024 funds, not sure how you'd work this into a tax filing, since by definition, these are non assessable monies. But, I guess, if someone really wanted these monies identified, they would have to design some kind of reporting form or instruction. This has all become so mind boggling, I can't believe the Thais haven't cried "uncle" yet.

..... or wants to buy a condo. No, the Thais aren't going to kill FDI, a golden goose, the pride of the BoI, who works directly for the Prime Minister's office. And to screen all remittances as income is not only self-defeating and stupid -- it's impossible to parse income from capital. Nope, this scheme will either be dropped; or put on hold until they can regroup and tax foreign income, not remittances. FDI would be saved, and CRS and FATCA information, worthless for remittance reporting, could now be used to flush out tax avoiders. Stay tuned.

Doubtful the filing threshold was established well below the taxable income level due to sneaky farangs....

If push came to shove between a country's Tax Code and a Tax Treaty, the treaty would prevail. As an example. The US Tax Code says that you can get a tax credit on your US tax return for taxes paid to a foreign country IF those taxes were against foreign earned income. But, under the US DTA with Thailand, for example, if Thailand gets exclusivity (overriden by the saving clause, however) in the taxation of my IRA or private pension (which they do, if, currently remitted), the treaty says I can get a credit for those taxes paid on my IRA, even tho' this is US income, not foreign income. You simply have to attach Form 8833 to your tax credit Form 1116, which tells the IRS that their Code has been trumped by an international treaty. Hopefully, we won't have to get the Embassy involved with the Ministry of Finance over any misunderstandings.....

Actually, Taxable Income (TI) is Adjusted Gross Income (AGI) less your Standard Deduction (or itemizations, if those are greater than Standard Deduction). So, AGI is equivalent to the Thai "assessable income" (AI). And in a similar fashion to the US, Thai Taxable Income would be what's left after you subtract out allowances and exemptions. Thus, if single, you automatically have at least 210,000 (150+60) subtracted out from your assessable income to arrive at Taxable Income. But, you're required to file a return if you have 120,000 in AI; but you have no Taxable Income until your assessable income exceeds 210,000..... So, why do the Thais want all these tax forms filed if there's no taxable income, thus no check attached? Are they taking a survey? Dumb. To the US example, you don't have to file a tax return if you have no Taxable Income (unless you're self-employed). Of course, most do file, mainly to get back over withholdings of taxes.

Pure conjecture. Why Thai RD would want to be inundated by a forest of paper, to prove a negative, is beyond me. Where are getting your information?

I would not need to declare the US taxes paid on my Air Force pension and Social Security as a credit -- since my Air Force pension and Social Security would not be assessable income, under the DTA, for Thai tax purposes. Thus, posting a credit against nothing would be wasting ink. So, I don't think any amended Thai tax forms will have line items for non assessable income.

Amen. Or just stomp on those trying to close the loophole. We may wake up tomorrow and have nothing more to discuss on this thread, as it will have all disappeared.

Interest earned in an IRA has the same complexion as the tax deferred principal that funded the IRA, namely, it's not taxable until withdrawn. So, if you're currently not drawing down your IRA, you have no tax liability with either the US, or the Thais -- the interest is blended with the principal. In my case, I have a Required Minimum Distribution (RMD) which is taxable, but which is an amalgamation of principal and compounded interest, but which there is no distinction needed -- it's just a glob of taxable income. Now, if the Thais go to taxing "income" (and not income remitted), then I'll have a very reportable income amount from my RMD (here's where FATCA and CRS reporting comes in -- with income, not remittances). And per the DTA, Thailand has first dibs on taxing that. So be it -- the credit for this against my US taxes will make this neutral. But if they stick to the "remitted" fiasco, I can just play games with the fungibility of the savings account from which all Wise transfers are made -- and claim FIFO and Aunt Martha's original funding as the source of remittances. That could prove interesting, but I doubt they're sophisticated enough, or adequately funded, to go down this road. We'll see....

Not sure I understand your logic.... Yes, many Thais work abroad to get a decent wage. That their country of employment doesn't tax them, and that Thailand doesn't tax them (because of the next year remitted rule), has been a nice bonus. Now, apparently, they'll have to pay Thai income taxes on that nice wage earned abroad. But what's unfair about that? The tax is at the same rate as their Thai neighbors with jobs in Thailand. Why should they get the added bonus by working abroad of no income tax? I guess this is why we're seeing the new ruling proposal -- the Thai working abroad, who has a fatter paycheck than his hometown neighbor, should also be subject to Thai taxes.