1040 NR Capital Gains

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1040 NR Capital Gains

Post by elgoog »


Canadian resident with TN-1 working in California.

1. Moved to USA in September 2019. Filed 1040NR and 540NR for 2019.
2. Had opened a brokerage account with a U.S. brokerage in December 2019. I came back to Canada in March 2020 and informed the U.S. brokerage that I had moved back to Canada and was going to be a non-resident for the rest of the year. They told me to close the account, which I did.

My questions:
1. I made some capital gains (~$500 from dividends and sale proceeds) with the U.S. brokerage account. I will be filing a 1040NR and 540NR for 2020 since I don't meet the SPT. Should I report these gains on 1040NR or on my Canadian tax return?
2. Should I also be reporting them on my 540NR? Since California tax is based on residency, should I allocate the capital gains to the part of the year I was residing in California? Let's say I stayed there for 3 months. So I will report $500 * 0.25 = $125 as capital gains for 540NR.

Thank you.
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Re: 1040 NR Capital Gains

Post by nelsona »

Federally, Cap gains are taxed based on residency, so they are not taxable in US. You can report the, for clarity, on the NEC portion of the 1040NR, and use 0% as the taxrate.

For Cali, consult their tax guide.

Report them as normal in Canada, using any tax paid in Cali as a credit in canada.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D
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