U. S. Expats Are Revealing The "We're Being Scammed" Realizations They Had After Moving Abroad

[DFW]

124. Thanks! My prospects are vague at best.

That was a good move on your part not to convert to a Roth IRA. I thought that since I had paid my taxes in full, and prior to making my application for a permanent residence visa, that the Germans would leave me alone on that. The text of the Double Taxation Treaty says that an American citizen in the USA paying taxes in the USA, cannot be taxed again by the Germans on the same income/assets. How was I to know the Germans would ignore that? Also, distributions from S-Corps are taxed in the USA prior to distribution, and are considered partnerships, which the Germans do not double-tax. So, the Germans have re-labeled the partnership income “dividends” so that they can double tax them. S-Corp income isn’t mentioned in the Double Taxation Treaty, so the Germans feel like they can just take it whether it was already taxed in the USA or not. The only thing they agree on is that the USA taxes interest income earned in the USA, and the Germans get to tax Social Security income in Germany.

Oddly enough, on one thing, the Germans were more lenient. I had bought, on a lark, 2 kilograms of iridium for €11,000 in 2011. I sold it about ten years later for €150,000. All I had to do was prove to the Germans that I had owned it for over a year, and the gain was tax-free in Germany. But not so in the USA. I guess I am an idiot, but I reported the whole thing to the IRS, and had to pay 31.8% on the gain in the USA. It still left me with a decent bit of cash, so I didn’t complain.