Do you know if establishing proper "economic substance" requires a physical presence in the Cayman Islands? Or would hiring local directors and maintaining an actual office there be sufficient?

Proper economic substance typically requires more than just a local address and hired directors. The Cayman Islands themselves have economic substance requirements that include things like adequate physical presence, locally-managed bank accounts, local employees, and appropriate local expenditure relative to the level of activity. The key issue in your specific case though is that if you're physically sitting in New York making the trading decisions and executing trades, it's going to be very difficult to argue that the economic activity isn't occurring in the US. The IRS looks at where the value-creating activity is actually happening, not just where the paperwork says it's happening.

You're right - there is no tax treaty between the US and Cayman Islands, which actually makes things more complicated. Without a treaty, there are fewer protections against double taxation and fewer clearly defined rules. Also, as a US-based trader (even temporarily), FATCA reporting kicks in at $50K for foreign accounts, and the OP mentioned potentially making $135K+ which would definitely trigger those thresholds.

Do you know if there's any catch to these free bank offers? Do they try to upsell you to premium versions halfway through or something?

Nope, no catch with the bank offers I've used. You get the full version of whatever tier they offer (usually Deluxe or Premier). You access it through your banking portal, and it's fully functional without upsells for the federal return. Some banks only cover the federal filing and you'll pay extra for state returns, so check the details. Also, these deals usually apply to online versions, not desktop software. But still a huge savings - just requires being a member of that financial institution.

Wow, that's kind of eye-opening and confirms what I suspected. I always wondered how much training the seasonal folks got. Do you think I'm better off with TurboTax then for a pretty basic return with just some basic investments?

Wouldn't this be risky though? Sounds like it could trigger an audit if you're deducting expenses for a vehicle not in your name.

It's not risky if you document everything properly and have a legitimate business reason. The key is having a written agreement showing you're essentially "renting" or "leasing" the vehicle from your friend for business purposes. You'd need to issue them a 1099 if you paid them over $600 in a year, and they would need to report that income. Without proper documentation though, yes, it would definitely raise red flags. This only works in true business situations, not just as a way to deduct helping a friend.

This is actually a really good point. I stressed about tracking all these little deductions last year only to find out I was still better off with the standard deduction. Unless you have major expenses, the math rarely works out to itemize these days.

I have some experience with this. Indian REITs are still relatively new but from a US tax perspective, they don't get the same favorable treatment as US REITs. The distributions get taxed as ordinary dividends without the partial return-of-capital treatment that US REITs often have. Also, you'll face additional reporting requirements on Form 8621 if the Indian REIT is considered a PFIC, which many foreign investment structures are. This can result in much more complex tax filing.

Thanks for the explanation about the taxation differences. That's really helpful to know about the ordinary dividend treatment without the return-of-capital benefits. So it sounds like from a tax efficiency standpoint, I might be better off sticking with US REITs or finding a US-based ETF that gives exposure to the Indian real estate market rather than directly investing in Indian REITs. The Form 8621 filing requirement sounds like a headache I'd rather avoid.

TurboTax can handle the basic foreign tax forms like 1116, but I found it struggles with more complex situations involving PFICs and multiple types of foreign income. I switched to using a CPA who specializes in international taxation after TurboTax kept giving me errors for my Indian stock investments.

Oh that's scary! I haven't been great about keeping receipts for my textbooks... do digital receipts from Amazon and the campus bookstore work too? And how long should I keep these records?

Digital receipts are absolutely fine! Just make sure they clearly show what was purchased (the book title), the date, and the amount. I recommend saving them as PDFs and keeping them in a dedicated folder on your computer or cloud storage. You should keep all tax-related records for at least 3 years after you file your return, since that's typically how far back the IRS can go for an audit. Some experts recommend keeping them for 6-7 years to be extra safe. My brother's audit happened about 2 years after he filed that return.

The felony drug conviction restriction was actually removed a few years ago! That's no longer a disqualifying factor for the AOTC as of the tax law changes in 2021.