US tax on capital gains from sale of US stock for Non resident alien
I sold stock last year in US when my status was non resident alien (also not physically present at all in that year). From irs.gov and other resources, I read the gains are not taxable (however my CA thinks they are 😏). Anyone been through this? If you ended up paying tax, can you please share a link that affirms this. Thanks! Edit: Adding some refs If you were in the United States for less than 183 days during the tax year, you will not be taxed on your capital gains, except for the following types of gains: 1. *Gains that are effectively connected with a trade or business in the United States during your tax year* 2. Gains on the disposal of timber, coal, or domestic iron ore with a retained economic interest 3. Gains on certain contingent payments received from the sale or exchange of patents, copyrights, and similar property 4. Gains on certain transfers of all substantial rights to, or an undivided interest in, patents Gains on the sale or exchange of original issue discount obligations Ref: https://www.irs.gov/individuals/international-taxpayers/fixed-determinable-annual-periodical-fdap-income You would think sale of stock can fall under (1) but no, apparently it is not considered as engaging in trade or business in the US NOTE: If your only U.S. business activity is trading in *stocks*, securities, or commodities (including hedging transactions) through a U.S. resident broker or other agent, you are NOT engaged in a trade or business in the United States. Ref: https://www.irs.gov/individuals/international-taxpayers/effectively-connected-income-eci Non-IRS refs https://www.investopedia.com/ask/answers/06/nonusresidenttax.asp www.forbes.com/sites/greatspeculations/2018/08/22/how-to-save-u-s-taxes-for-nonresident-aliens 2 year old link)
I am in same Dilemma. H& R block is telling me that I am due taxes in US as I received 1099. If I had submitted W8-BEN to my broker, this would hv not happened.
That’s interesting, I didn’t know there was connection with W8-BEN. HRBlock fees felt exorbitant this time, so went with a local CA. Did you opt for personal tax advisor? They might give advice based on your custom situation
A flat tax of 30 percent was imposed on U.S. source capital gains in the hands of nonresident alien individuals physically present in the United States for 183 days or more during the taxable year. This 183-day rule bears no relation to the 183-day rule under the substantial presence test of IRC section 7701(b)(3). https://www.irs.gov/individuals/international-taxpayers/the-taxation-of-capital-gains-of-nonresident-alien-students-scholars-and-employees-of-foreign-governments
I was not physically present for 183 days during the taxable year
Nice
Why would the gains not be taxable? Asking in case I missed some tax loophole. If you are a non resident alien, you are exempt from paying taxes on non-US income but still liable for US income. Residents and citizens have to pay taxes in worldwide income (and get credit if US has treaty with that country)
That’s what I get from irs.gov, expectation I guess is you will be taxed for this as worldwide income in your resident country. A quick google search also confirms this. Updated the question with some refs
Did u got the correct answer? I am in US and a non resident alien. And I am thinking of selling my stocks
Hey there! Saw your post regarding non resident alien tax and I’m in the same situation. Seems like if we stay less than 183 days we don’t need to pay capital gains tax on the sale of stocks. Do you think I’ll be eligible to NOT pay capital gains tax if I left the US in 2022 Dec and sold my shares in 2023 Feb ? Do I not have to pay tax on the sale of stocks I did in 2023 Feb when I file tax returns in US for next year (2024)? Also is the same applicable if I sell more stocks next year in 2024 as well and when I file in 2025 I would not have to pay capital gains tax on the sale of shares made in 2024.
https://www.nerdwallet.com/article/taxes/capital-gains-tax-rates
Doesn’t talk about non resident aliens 🤨