Have a Tax Question? Ask a Tax Expert
Hello and thank you for using Just AnswerAs a resident alien you will be filing Form 1040 so you will use the Schedule D to show the sale of stock.
Thank you in advance for clicking ACCEPT
Hi I am a new user on justanswer, just tried to understand how this website works
But I will be receiving 1042 instead of 1099
You still need to show the sale on your tax return. If they withheld then you would show the tax withheld also on your 1040 but the sale must be reported on your 1040 using the Schedule D
This will require you to report the basis and sales price.
Sorry, I have very little idea about fax filing. So I need to chat little bit to get more idea
so I have 1042 from the Morgan Stantley
so when I will file the tax. I should show the sale in schedule D instead of mentioning 1099 OR 1042?
Neither of those would be attached to your return anyway.
also first of all I want to know that is that a problem that I used W-8BEN by mistake even if I am resident alien?
I am just worried
For Morgan Stanley, the W8 is held by them to show why they did not withhold on the sale if they were required to withhold.
how can I notify IRS about this mistake?
The 1042S was sent to the IRS already so they know about the stock sale. WHen you report it on your retrun then you have met your responsibility.
You do not need to report the misclassification to the IRS
but can IRS question me why I filled W8 form even if I am a resident alien?
They would ordinarily understand, if, they were to request the information. The W8 would have allowed you to claim a treaty benefit. You are not doing that because you know you are not allowed and you are going to report the sale on your return.
So, I should just report $ numbers from 1042 in schedule D, that's it?
YOu need to use the Schedule D to report the sale, if the 1042S is correct with the cost and the slaes rice then yes, use those numbers.
ok one last question
You said "You still need to show the sale on your tax return. If they withheld then you would show the tax withheld also on your 1040 but the sale must be reported on your 1040 using the Schedule D"
so here they means - Morgan Stantley OR IRS?
they did not withhold anything from the profit I made, so IRS will withhold tax from the profit right?
No, you will calculate the tax on your return. The gain will be added to your other income and then taxed. Withholding can only happen before a payment is made. Morgan Stanley would have withheld had you not signed syaing you were exempt basedon treaty or some other reason, but as a resident alien you did not need to fill out anything really. You just get taxed like a US citizen, which is to show it on your Schedule D and 1040.Thanks again and you can always come back even after you click ACCEPT
thanks for the explaination. I will click on Accept now