US investments for a Canadian student in the US

mappiq · Post by **mappiq** » Mon Mar 10, 2014 2:25 am

I am a Canadian, studying (in graduate school) in the US on a J-1 status, and have been doing so for 3.5 years already. The university gives me a stipend, which exceeds $10,000. While I am here in the US, I would like (if possible) to invest my US savings by buying shares in an ETF through Fidelity. Do I have to pay 30% tax on the gains? Fidelity sent me a W-8BEN, but I cannot figure out all this tax treaty stuff.
I know am I not exempt from US taxes, since I make more than $10,000, but do I really have to pay 30% tax? If not, what treaty article can I cite? Is this for dividend, or capital gains, or interest? Or all?)

Thank you for any help you can give me!

nelsona · Post by **nelsona** » Mon Mar 10, 2014 9:39 am

As a Cdn resident, you are exempt from US tax on cap gains, even those thru a US broker. send them a w-8ben using the cap gains article of the treaty.

mappiq · Post by **mappiq** » Tue Mar 11, 2014 1:08 am

Thank you very much! That is good news.
So, am I correct in the following:
As a Canadian resident, even though I live in the US for multiple years (as a J-1 status non-resident), I pay US tax rates of:
0% tax on capital gains
0% tax on bank interest
15% tax on dividend income

So when my bank sends me a 1099-INT saying how much interest I earned during the year, I don't have to worry about it?

nelsona · Post by **nelsona** » Tue Mar 11, 2014 6:11 am

Yes, on your Cdn tax return. You are NOT a non-resident of Canada.

nelsona · Post by **nelsona** » Tue Mar 11, 2014 6:12 am

Also, be careful of how long your J-1 status exempts you from US residency. it is not forever.