RetireJapan

Kanto wrote: ↑Wed Jan 27, 2021 1:36 am

judomarshall wrote: ↑Wed Jan 27, 2021 1:24 am You can withdraw early, but you'd get taxed 20% and not be able to get any of the tax advantages associated with NISA.

Oh, I see, thank you for the clarification.

That is steep. You would need 4-5 years in the market to cover that cost of early withdrawal?

Have you found any documentation on the PFIC rate a minor with no income source would have to pay? Would it be more than 20%?

How much would you be "netting" with the tax-free investment after X years?

Seem like you need to map it out in Excel, lots of factors.

judomarshall wrote: ↑Wed Jan 27, 2021 1:45 am

Kanto wrote: ↑Wed Jan 27, 2021 1:36 am

judomarshall wrote: ↑Wed Jan 27, 2021 1:24 am You can withdraw early, but you'd get taxed 20% and not be able to get any of the tax advantages associated with NISA.

Oh, I see, thank you for the clarification.

That is steep. You would need 4-5 years in the market to cover that cost of early withdrawal?

Have you found any documentation on the PFIC rate a minor with no income source would have to pay? Would it be more than 20%?

How much would you be "netting" with the tax-free investment after X years?

Seem like you need to map it out in Excel, lots of factors.

I think the %20 tax would only be applied to the capital gains, but I am not certain.
I assume I'd also have to pay income tax on it (Japanese taxes, that is).

What I want to know is whether the 37% PFIC rate would even matter since I am not even close to reaching the limit on the foreign earned income exclusion, but I wonder if the PIFC taxes are covered under the tax treaty.

Kanto wrote: ↑Wed Jan 27, 2021 1:47 am

judomarshall wrote: ↑Wed Jan 27, 2021 1:45 am

Kanto wrote: ↑Wed Jan 27, 2021 1:36 am

Oh, I see, thank you for the clarification.

That is steep. You would need 4-5 years in the market to cover that cost of early withdrawal?

Have you found any documentation on the PFIC rate a minor with no income source would have to pay? Would it be more than 20%?

How much would you be "netting" with the tax-free investment after X years?

Seem like you need to map it out in Excel, lots of factors.

I think the %20 tax would only be applied to the capital gains, but I am not certain.
I assume I'd also have to pay income tax on it (Japanese taxes, that is).

What I want to know is whether the 37% PFIC rate would even matter since I am not even close to reaching the limit on the foreign earned income exclusion, but I wonder if the PIFC taxes are covered under the tax treaty.

PIFC taxes are covered under the tax treaty.

Almost certainly not.