F1 student in US -capital gains on stocks transferred across
Moderator: Mark T Serbinski CA CPA
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F1 student in US -capital gains on stocks transferred across
Hi there,
In short: what is my cost basis if I owned stocks in canada, transferred them to the US and then sold them in the US? book value in canada? FMV on date of transfer?
In detail: I'm a Canadian citizen and law student studying on an F1 visa in the US. My law program is a full 3 year program.
Before moving to the US I held a number of US stocks with a Canadian discount brokerage. After moving to the US I eventually switched to an American discount brokerage. In 2011 I sold a number of stocks, however the American brokerage did not provide me with tax forms reporting capital gains/losses as they believe I am tax exempt, however a reading of the IRC leads me to strongly believe I am subject to 30% capital gains due to my presence of more than 183 days per year.
To be in compliance with the IRS I would like to manually report the capital gains I realized in 2011, however I am unsure of the basis I should use.
If anyone has encountered this in the past, I would appreciate your wisdom.
Best,
fighting_illini
In short: what is my cost basis if I owned stocks in canada, transferred them to the US and then sold them in the US? book value in canada? FMV on date of transfer?
In detail: I'm a Canadian citizen and law student studying on an F1 visa in the US. My law program is a full 3 year program.
Before moving to the US I held a number of US stocks with a Canadian discount brokerage. After moving to the US I eventually switched to an American discount brokerage. In 2011 I sold a number of stocks, however the American brokerage did not provide me with tax forms reporting capital gains/losses as they believe I am tax exempt, however a reading of the IRC leads me to strongly believe I am subject to 30% capital gains due to my presence of more than 183 days per year.
To be in compliance with the IRS I would like to manually report the capital gains I realized in 2011, however I am unsure of the basis I should use.
If anyone has encountered this in the past, I would appreciate your wisdom.
Best,
fighting_illini
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- Joined: Tue Apr 03, 2012 7:10 pm
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IRS Rev Proc 2010-19 has specific instructions that you must follow in order to be able to used your deemed disposition value when leaving Canada as your new cost basis for US purposes.
Otherwise it is the original cost basis.
Otherwise it is the original cost basis.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
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Ah, I had not read this. You are NOT a US tax resident because of your F status.
So, you file a 1040NR, which nmeans you don;t report cap gain in US at all, but you report everything in canada as if you never left -- because technically you haven't, since you are not e US tax residnt, and you must be tax resident somewhere.
So, you file a 1040NR, which nmeans you don;t report cap gain in US at all, but you report everything in canada as if you never left -- because technically you haven't, since you are not e US tax residnt, and you must be tax resident somewhere.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
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sorry to complicate things, but what about this:
http://www.irs.gov/businesses/small/int ... 53,00.html
"RC section 871(a)(2) imposes a flat tax of 30 percent 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. .... The same rule applies to a foreign student or scholar visiting the United States in F, J, M, or Q nonimmigrant status whose presence in the United States equals or exceeds 183 days in any calendar year."
My reading of this makes me believe I do have to file capital gains with my 1040-NR, however I am still unsure whether I can used deemed disposition value when I have not "emigrated" from Canada....
http://www.irs.gov/businesses/small/int ... 53,00.html
"RC section 871(a)(2) imposes a flat tax of 30 percent 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. .... The same rule applies to a foreign student or scholar visiting the United States in F, J, M, or Q nonimmigrant status whose presence in the United States equals or exceeds 183 days in any calendar year."
My reading of this makes me believe I do have to file capital gains with my 1040-NR, however I am still unsure whether I can used deemed disposition value when I have not "emigrated" from Canada....
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I'm not sure how relevant this is to "U.S. source capital gains" portion of that link i posted - but the american stocks in question were purchased by Canadian earned income.. although I will presume that using the american brokerage to realize the gains is enough to derive it as a "U.S source capital gain"
thoughts?
thoughts?
The Cdn treaty overrides this, making the tax 0% for non-residents.
Basically, intil you are off F status, you never leave Canada. All you ned to report on 1040NR is US-sourced wages and scholarships. Not cap gains, not interest. The 1040NR will contain sufficient information for IRS to realize that you are non-resident due to F status.
You will of course reamin fully taxable in your province.
Basically, intil you are off F status, you never leave Canada. All you ned to report on 1040NR is US-sourced wages and scholarships. Not cap gains, not interest. The 1040NR will contain sufficient information for IRS to realize that you are non-resident due to F status.
You will of course reamin fully taxable in your province.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
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Not really much to celebrate, since you would not be more taxable in US, than you are in Canada.
Its not a treaty provision. Its your F1 status, which keeps you non-resident.
Look at the treaty article on "Gains".
Its not a treaty provision. Its your F1 status, which keeps you non-resident.
Look at the treaty article on "Gains".
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Nelsona, for my info he is a resident of Canada and therefore a non resident for tax in US and must file a 1040NR, now under treaty again can he file a full 1040 instead repoerting his world income including the cap gain and int and use all the exemptions on a full 1040 as any other citizen could again under teh treaty which allows CND to do this, could he invoke this treaty position if he wanted to.
JG
Under all versions of the treaty he can file a 1040, jus like any other Cdn can. However this does nothing to his Cdn tax residency. He is merely asking to be TREATED like a US resident, but it does not MAKE him a US resident by US rules, nor by treaty, thus he cannot use the treaty residency clause to break Cdn tax residency.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing