TN visa holder - tax residency

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okinawafl
Posts: 96
Joined: Sun Jul 11, 2021 12:38 pm

Re: TN visa holder - tax residency

Post by okinawafl »

thanks nelsona for your kind explanation. You're truly knowledgeable. Many thanks to you and Seribinski Accounting Firms for setting this great forum.

Have one thing I just think about about my U.S. online brokerage account (opened with my SSN when I was an internship in CA):

1. as a NR of canada from Aug, I only need to report all of my income earned up to date I leave Canada in T1 (less than 10K), and don't need to report any income earned outside canada after I leave.

2. as a NR of US (1040NR), I need to report income earned in U.S. from date I arrive but capital gain tax is exempt for 1040NR. For N.Y. state tax, I think it is exempt too?

My problem is I had around u.s. 2k of U.S. exchange stock shares, if I really sell them around Nov-Dec this year and have short-term capital gain and report in 1040NR, it may not tax on me. And in T1 departure return, since the income is not earned in Canada, I can't report and pay tax too. I am worry, which country and how I should pay tax the capital gain earned?

Am I get into trouble if I sell the stock late this year? Shall I sell all of them now?
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: TN visa holder - tax residency

Post by nelsona »

Technically, since you are no longer a resident of canada, you do not benefit from 0% cap gains, but rather would have to pay 30% on these post=departure gains. So, as I have hinted all along, you will be far better off filing a 1040 full year.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
okinawafl
Posts: 96
Joined: Sun Jul 11, 2021 12:38 pm

Re: TN visa holder - tax residency

Post by okinawafl »

Thanks nelsona. I appreciated your information and also and this forums offered by Serbinski Accounting Firm.

I have another trouble situation. I have a U.S. online brokerage account (open with my SSN when I worked as 4-month intern before).
The brokerage account now has approx 2.5k worth of U.S. stock. If I sell them in dec after I moved to U.S., May I know how I can be taxed because:
1. In Canada T1, my worldwide income will be only around 10K freelance up to Aug. I assume I cannot report the short-term cap gain I get in December; but
2. In 1040 NR (for Sept-Dec 2021), although the Cap gain per form 1099 can be reported, it won't be taxed for NR? But my understanding is I must be taxed somewhere, may I asked which return I can report it and pay tax on it?

3. For my 2020 1040NR and state tax return for my few months intern work in N.Y., I am looking at it now, the Form 1099 dividend ($15) and short-term cap gain (less than $300) was reported in 1040NR schedure NEC but taxed only on dividend, cap gain around 0.3k was not taxed. Also, I can't find the amount was reported in "New York state" return so I assume I didn't pay any state tax on the dividend and cap gain income. Shall I ask the accountant in U.S. to amend my state return?
okinawafl
Posts: 96
Joined: Sun Jul 11, 2021 12:38 pm

Re: TN visa holder - tax residency

Post by okinawafl »

sorry nelsona
I just put a post again as I though my yesterday questions was not posted successfully. Please ignore the post I can posted few minutes ago.

I just want to check one thing, is it as a non-resident last year (2020 NY state tax return), my dividend income and short-term cap gain earned through the US online brokerage is not subjected New York states tax. Thanks.
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: TN visa holder - tax residency

Post by nelsona »

If you were not a resident of a particular state, then they are only intersted in income sourced to that state (ie. wages).

It is federally that you may be subject to 30% tax on cap gains on your 1040NR, but only if you are not a CDn tax resident.

This will end this thread: File your federal taxes in the year you move as FULL YEAR 1040.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
okinawafl
Posts: 96
Joined: Sun Jul 11, 2021 12:38 pm

Re: TN visa holder - tax residency

Post by okinawafl »

Hi nelsona,

I follow your information to check more information on how to file as Full-year 1040, and just finish reading the IRS 519, found that on p.9, if I want to be treated as Full-year resident (without passing SPT this year), one of the condition is I need to be "married" but I am single.

But I saw other information on p.8 - First-year choice (for those not pass SPT and not required to be married) - taxpayer can make the choice with writing a statement to Form 1040 to make first-year choice to be treated as a U.S. resident for part of 2021. (If this is possible, I will also attach 1040NR for Jan-Aug as well for IRS reference.)

Am I understand correctly so I can file 1040 as resident of US for tax purpose from date I arrive New York (say Sept 1)? And if I can, would I also be filed as resident of New York State and City for my 2021 U.S. tax?

Thanks for clarifying.
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: TN visa holder - tax residency

Post by nelsona »

You will be using the treaty, not Pub 529.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
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