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USTaxAdvising
USTaxAdvising, CPA
Category: Tax
Satisfied Customers: 1237
Experience:  US Taxation specialist.
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Hi, I hold stocks in the us but I am not a US citizen nor I

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Hi, I hold stocks in the us but I am not a US citizen nor I live in the US, is it true that I have to pay capital gains tax to the crappy government even though I should have no obligation to?

USTaxAdvising :

Hello, Thank you for using justanswer. I can assist you with your questions today.

USTaxAdvising :

No, you do not have to pay U.S. tax on the sale of your U.S. based stocks.

USTaxAdvising :

This is assuming you were not a resident in the U.S. during the year.

USTaxAdvising :

The sale of U.S. based capital stock is not subject to U.S. taxation.

USTaxAdvising :

If you were in the United States for less than 183 days during the tax year, capital gains are tax-exempt unless they are effectively connected with a trade or business in the United States during your tax year.


USTaxAdvising :

The above is per IRS Publication 519 - http://www.irs.gov/publications/p519/ch04.html#en_US_2012_publink1000222305

USTaxAdvising :

Try not to read too much into it as it is very confusing but basically, so long as you aren't doing business in the U.S. you yourself and not engaged in a U.S. trade or business thus the sale of U.S. based capital stock is not taxable to you. It is not U.S. sourced income nor is it effectively connected income.

USTaxAdvising :

Here is another reputable source confirming this - http://www.bankrate.com/finance/taxes/capital-gain-tax-nonresident-investors.aspx

USTaxAdvising :

I trust this provides the clarity you were looking for. Please let me know if something is not clear or if you have any follow up questions.

USTaxAdvising :

Best regards,

Customer:

Hi thanks for answer! So basically I can buy or sell with no worries of being taxed as I have no connections to the us other than the purchase of the stock?

USTaxAdvising :

Correct. So long as you are not present in the U.S. for more than 183 days.

Customer:

That's lovely thank you very much for your help! have a great day!

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