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What is the profit from? When you say it is interest income- was this interest income earned over a period of time and now brought into US?
Are you a US Citizen?
yes I am a US citizen. Nothing has been brought in not even my investment or cash basis. The investment is in periods of sixty days and then can be reinvested. when does my tax oblagtion start? Does it become income before actually recieve it? Can't I first draw out my investment first tax free?
Your tax obligation starts when you earn income on your investment. The fact that you reinvest the income does not defer your tax obligation as you have constructively received the income though you may have reinvested it.
Let me know if you have any question.
Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.
The IRS would expect you to pay taxes on the income based on when the income was received or deemed to be received.
For instance -