I'm just starting to think in this direction.  Would appreciate any comments.

It would be great if the board began sharing this type of tax/options info.  I own IOC shares in a 401K at Fidelity.  I was checking to see how the deal might affect that.  If the deal goes through, then the OSH shares land in my US 401K account at Fidelity as well as the cash from the certification to come ~ a year later.  To trade the OSH shares, I have to call Fidelity to do it manually with their international group.  I can't trade online per Fidelity.  Commission would be around $80+ (fixed) which includes paying Fidelity, an Austrailian broker they select, and a currency exchange fee.This is one option for me.

Option 2 is I could roll over my entire 401K to an IRA in order to get the IOC or OSH shares out of the 401K.  Can't do an inkind partial transfer.  It's all or none.  The rules on your 401K may be different.  But as long as the shares stay in the 401K or IRA, then when the distribution is taken, it's all treated as income for tax purposes.

Once the shares are in the IRA, then I have more options with a likely variety of tax impacts.  This is where it gets interesting and more complicated.

One option is E.g., convert the IRA to a Roth.  Too late now that the price is up 35+%.  The conversion cost will now be a lot higher.  But may still be worth doing.  Because a year later the cash from the certification will land in a Roth account tax free, I think.  Of course if IOC shares fall back some before making the conversion, then the conversion cost will be reduced.  And if something really sour happens after the conversion, then you can recharacterize and put it back in the IRA to reverse the conversion.

My understanding of this is that the conversion treats all of the IOC/OSH shares converted as pure income if bought with pretax dollars.

If the whole thing gets moved to a Roth, then whatever happens from there on is tax free, I assume.  So if the recert adds e.g., $25 per IOC share in 2017, then that is 100% tax free gain, I think, since it's in the Roth account.  Of course a tax professional would need to bless that.  But if so, then that is a good opportunity to avoid taxes.  And of course if the OSH shares actually do grow in value, then that is tax free too plus they pay a tiny dividend.

One other point.  Fidelity says OSH trades in US$ on the OTC.  I looked it up and see it listed as OISHY.  Very few shares trade each day, so probably better to check with the AUX market price.  But Fidelity says I can trade online with the $7.95 commission during US maket hours in US$.  Another consideration.  But the commision difference is peanuts compared to the investment.

Comments, suggestions, corrections?

Kaliboo

'Kaliboo' pid='69759' datel Wrote:

I'm just starting to think in this direction.  Would appreciate any comments.

It would be great if the board began sharing this type of tax/options info.  I own IOC shares in a 401K at Fidelity.  I was checking to see how the deal might affect that.  If the deal goes through, then the OSH shares land in my US 401K account at Fidelity as well as the cash from the certification to come ~ a year later.  To trade the OSH shares, I have to call Fidelity to do it manually with their international group.  I can't trade online per Fidelity.  Commission would be around $80+ (fixed) which includes paying Fidelity, an Austrailian broker they select, and a currency exchange fee.This is one option for me.

Option 2 is I could roll over my entire 401K to an IRA in order to get the IOC or OSH shares out of the 401K.  Can't do an inkind partial transfer.  It's all or none.  The rules on your 401K may be different.  But as long as the shares stay in the 401K or IRA, then when the distribution is taken, it's all treated as income for tax purposes.

Once the shares are in the IRA, then I have more options with a likely variety of tax impacts.  This is where it gets interesting and more complicated.

One option is E.g., convert the IRA to a Roth.  Too late now that the price is up 35+%.  The conversion cost will now be a lot higher.  But may still be worth doing.  Because a year later the cash from the certification will land in a Roth account tax free, I think.  Of course if IOC shares fall back some before making the conversion, then the conversion cost will be reduced.  And if something really sour happens after the conversion, then you can recharacterize and put it back in the IRA to reverse the conversion.

My understanding of this is that the conversion treats all of the IOC/OSH shares converted as pure income if bought with pretax dollars.

If the whole thing gets moved to a Roth, then whatever happens from there on is tax free, I assume.  So if the recert adds e.g., $25 per IOC share in 2017, then that is 100% tax free gain, I think, since it's in the Roth account.  Of course a tax professional would need to bless that.  But if so, then that is a good opportunity to avoid taxes.  And of course if the OSH shares actually do grow in value, then that is tax free too plus they pay a tiny dividend.

One other point.  Fidelity says OSH trades in US$ on the OTC.  I looked it up and see it listed as OISHY.  Very few shares trade each day, so probably better to check with the AUX market price.  But Fidelity says I can trade online with the $7.95 commission during US maket hours in US$.  Another consideration.  But the commision difference is peanuts compared to the investment.

Comments, suggestions, corrections?

Kaliboo

If you will have the broker hold your IRA, then you are pretty much limited to what that broker permits in IRA accounts.

Years ago, I created an LLC and converted my IRA accounts to self directed using a trustee that is easy to work with.  I basically bought the LLC with my IRA funds and now all my IRAs are rolled into the LLC and I can pretty much invest in anything, anywhere I want. 

My LLC has several broker accounts including offshore which can and does easily deal in Australian markets as well as most others.