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Question

I'm a non US citizen and non resident spending few months a year in Florida were I've purchesed an apartament for my vacations. I've opened a small bank account to pay for the various services such as Electricity, water, TV etc. Part of the money that I've in the bank account has been invested in stocks. When I sell the stocks do I have to file taxes in US even if the 15% has been already withdrawn and I report the amount gained to my Country of residence?

Submitted: 33 days and 17 hours ago.
Category: Tax
Value: $30
Status: CLOSED
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Optional Information

State/Country relating to question: Italy

Already Tried:
nothing

Posted by Merlo 33 days and 17 hours ago.

Info Request

Hello XXXXXXX,

Are you considered to be a resident alien here in the US?

To meet the test of being a resident alien, you would have been present in the US for at least 31 days during the current year and a total of 183 days during the current year and the preceding 2 years?

Did the investment firm already withhold 15% from the sale of your stocks?

33 days and 17 hours ago.

Reply

No, I'm a resident of Italy.

Yes. The company has already withhold the 15%.

Posted by Merlo 33 days and 17 hours ago.

Answer

Hello XXXXXXX,

If you are a non resident alien, then you are not subject to tax on any gains you have from the sale of stocks in this country. You will want to file a tax return with the IRS at the end of this year to claim a refund of any tax that was withheld. You will do this by filing Form 1040NR with the IRS.

For future reference, you should fill out Form W-8BEN for the investment firms that holds your stocks. Once they have this form on file for you, they will no longer need to withhold tax from the sale of your investments.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you XXXXXXX

33 days and 17 hours ago.

Reply

My investment company has already fill out the form W-8BEN but they are withholding the 15% on interest and dividend, not on capital gain. I that correct?

Accepted Answer

Hello again XXXXXXX,

Your dividends and interest are subject to tax, so that is correct. I thought it was the actual gain from the sale of the stock that you were referring to.

As long as all tax has been withheld from the source of your investments, then you are not required to file a US return.

If this was helpful please press the Accept button.

Thank you XXXXXXX

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Expert: Merlo
Pos. Feedback: 99.8 %
Accepts: 
Answered: 10/20/2009

Accountant

25+ years tax consulting. Specializing in returns for US citizens living abroad

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