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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13117
Experience:  15years with H & R Block. Divisional leader, Instructor
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Hello! I am a UK citizen. I bought stock in a UK company in

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Hello! I am a UK citizen. I bought stock in a UK company in 2005 that merged with a US business in 2009. That new company has subsequently been bought by a larger US business recently. The new owners, a private US company based in Chicago, are looking to IPO around the end of this year. 6 months after that I will be able to sell my stock in the company. My question is this. If I am a non US citizen, and live outside of the US, are there any tax obligations to the US treasury once I have sold my stock?

Thank you!
Submitted: 4 years ago.
Category: Tax
Expert:  Robin D. replied 4 years ago.

Robin D :

Hello and thank you for using Just Answer,

When an asset, such as a share of stock (or any other security), is held for investment, any gain or loss on its sale or other disposition is usually considered a capital gain or loss. When a nonresident sells investment stocks or securities at a gain, that gain is exempt from U.S. tax unless the foreign investor is an individual present in the U.S. at least 183 days during the year. The exemption applies equally to long-term (assets held for more than one year) capital gains and short-term capital gains. Losses from the sale of investment securities cannot be used by a nonresident to offset other types of income that are subject to U.S. tax.

As an exception to this general tax exemption, gains from the disposition of stock in companies with substantial U.S. real property holdings may be subject to U.S. tax.

They may require you fill out a Form W8 Ben, this would cover the withholding agent and is not sent to the US federal taxing authority (IRS) but kept for their records to show why they did not withhold tax on the sale.

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