Generally, this is not at all a concern because you should have enough credit for the Israeli income tax that you paid to more than cover any tax due. With money in your Keren Hishtalmut, double taxation is not a concern for the simple reason that you never pay tax to Israel on this money anyway. However, this would change if you reach a point where the investment gains in your Keren Hishtalmut and your pension become very large (and/or your income gets very small) to the point where you actually do not have enough credit. It is merely a matter of locating a potentially good investment. It really doesn’t matter that much. While Security Analysis is worth reading, another of Graham’s books titled The Intelligent Investor is much more accessible and I would say compulsory reading. One of the most important concepts to come out of Benjamin Graham’s writings is the margin of safety concept.

The idea is that you’re buying at a discount to intrinsic value, thereby giving yourself a buffer or margin of safety in case anything goes wrong. For those that are serious about buying shares and who have not heard of Benjamin Graham, I suggest you take the time to find out about the man. Using fundamental analysis, we delve into the financial statements of the business to find out what it’s really worth – it’s value. To find out more about the success of his students, read Buffett’s article – The Superinvestors of Graham-and-Doddsville. When this happens on an ordinary “passive” investment, it costs you money because you lose out on the lower tax that you would have paid on long term capital gains and qualified dividends. If you dont research properly you could lose money and go bankrupt. However, I did find in my research that there are two things that may be worth considering in managing your Keren Hishtalmut and Israeli pension. The conclusion is that if you hold a mutual fund inside of your Keren Hishtalmut it is a PFIC.

The first way that you normally get eaten by PFIC is that the only practical way to report the income is to use the mark-to-market calculation. There were bumps along the way however. One is the amateur investor way; the other is the professional investor way. Well, unfortunately, one run would never amount to any tangible investment that would change our bodies, or our lives. Unfortunately, the government-financial complex of the world’s industrial economies has done more in this regard in the last few years than the terrorists could ever do. With practice you can reach a point where your dollars begin pulling in more and more profit for you. Though a good investment is required to begin in this industry, once you get started, success can be attained in a considerably shorter time period. As you know if you didn’t use the skipping tags, there are basically three ways that you get eaten by a PFIC when you buy a regular Israeli mutual fund in an ordinary taxable investment account. The old adage of buy low and sell high comes into play here. In addition, two Low Quality types of investments have been found: Question Marks and Dogs.

Dividend-focused investors cover all types or sub-categories of dividend investing. Also, the franking credits available under Australia’s dividend imputation system don’t apply to foreign dividends. Instead, he urged, that dividends should be the primary determinant of a stock’s value because dividend payments were far less volatile than earnings. On the one hand, the earnings are not “passive” and you can take a credit for Israeli income tax that you paid. This calculation treats all earnings the same and taxes them at your incremental income tax rate. When you calculate the investment gain to add to your income each year, you should be using the same dollar-based calculation. On the other hand, you will pay tax at the rate of ordinary income on these investments, even if some of the gain comes from dividends and long-term capital gains. However, any investment gain inside of an employees’ trust is anyway treated as regular income.