Non US person with 1m stock investment about to get a greencard. What is my tax implications?

VMware
virtuAL12

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virtuAL12
Oct 11, 2021 25 Comments

I am a non-US person with $1 million investment in the US stock market (800 deposits and 200 unrealized gains).

I never paid any US taxes (other than the standard 30% dividends taxes) but I am about to get my green card. That means I will have to start worrying about this whole tax phenomenon.

What is the best strategy to prepare for now to avoid getting hit by the capital gain taxes for example? Do I sell everything now and immediately buy again to realize my gains before I obtain my green card? In my mind, and pls correct me if I am wrong, this way I will be protecting myself from any past capital gain taxes since I will be starting fresh with zero realized gains when I obtain my legal residency. Am I wrong? Any better strategy to follow? Thanks. #investments #personalfinance

Edit: got lots of DMs asking if I got the GC via investment? No, it's through my spouse. My investments are completely separate.

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  • Apple
    TheCook

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    TheCook
    Normally you should not ask these questions here. Hire a cpa that knows this.
    Oct 11, 2021 4
  • Microsoft / HR
    ETYp35

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     ETYp35
    Prob too late - that would be a wash sale
    Oct 11, 2021 3

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  • New
    techeu

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    techeu
    Why do you move or accept the Green Card? I know many that gave it back because of high US taxes.
    Oct 11, 2021 1
  • Both tax law and immigration law are complex. Lot of people have opinions on these matters but unless they have faced the exact circumstances before and the laws haven’t changed since their experience then opinions are probably worthless.

    Your circumstances are rather unique - you need to consult a tax accountant who understands the situation. If you are in the middle east where there are many expats, you could ask an american expat for a referral. i don’t think you mentioned your country of citizenship, that may matter too.

    Is your spouse living in the US? If not, would also suggest an immigration attorney. There are only a limited set of circumstances when a US Citizen living abroad can petition for a spousal visa unless they can prove their residence outside the us is for a definite period of time, with the intent to return, and they maintain ties to the US.

    In general, a US Citizen or green card holder has to file a US return for their worldwide income. The exact taxation situation depends on the country and what local taxes you pay and there may be other considerations. This also impacts reporting requirements for all your accounts at financial institutions worldwide.

    If you don’t live in the US and don’t intend to move there anytime soon, you may want to reconsider your decision. You won’t be able to become a US Citizen without living the US for three years.

    So your green card imposes all the tax requirements of a US citizen or resident without any of the benefits. Your spouse can always file an immigration petition for you when you have a definite plan to move to the US.

    I am only posting rather obvious advice(consult an expert professional) because I know some people can be rather naive about these things but the consequences of making a wrong decision can be far reaching. A friend’s wife (now, gf then) truthfully told the border agent at the canadian/us border she was coming to the us with plans to move in with her boyfriend - that’s not “tourism” - she got sent back and had a 3 year ban of us entry. similarly, IRS can come back to you with back taxes, penalties and interest years later.
    Oct 11, 2021 1