Do visa holder pay US tax if out of country for >183 days?
Nov 4, 2020
35 Comments
https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test
If I didn't work in US in the past years and relocated to US in July this year, I will not pass the Substantial Presence Test.
1. Does that mean that I am not a US tax resident for this year and will not be taxed by US for income between July and December?
2. Supposed that I liquidate my stock next year, would the capital gain tax be the difference between July price and sale price, or purchase price (occurred before July) and sale price?
My country of origin does not have any tax treaty with the US.
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Substantial Presence Test
comments
"Nonresident aliens are subject to no U.S. capital gains tax, and no money will be withheld by the brokerage firm."
According to this article I don't have to pay tax on capital gains made this year.
I know the code as I stayed 181 days out side of US and I did through this exercise.
One disadvantage of filing as non-resident is that you will not be eligible for standard deduction (at least that used to be the code before the current reforms, please check the latest) and will have to itemize deductions.
Your capital gains will be calculated based on original purchase price and your date of moving to US has no impact on it. It may be valuable to take advantage of lower capital gains tax this year for you as your overall US income will remain low, so look into that.
US will collect tax from ur regular payroll regularless, but Canada and US has a tax treaty, so u will only need to pay that 10% to Canada when u file ur canadian tax, but if there isn't a tax treaty between US and ur country, then u need to pay double tax I think.
Is it base on July price and sale price, or purchase price (occurred before July) and sale price?