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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13120
Experience:  15years with H & R Block. Divisional leader, Instructor
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I'm an English international student in California on an F-1

Customer Question

Hi, I'm an English international student in California on an F-1 visa who moved to the US in August 2015. I worked in the UK until my move and am separately completing a UK tax return. I have not worked in the US (ie. on my university campus) since moving here. I do not presently have an SSN - I will this week be applying for an SSN for a job that will begin in May.
In 2014 I purchased a cryptocurrency called Ether in a pre-sale, paying for the Ether in another cryptocurrency, Bitcoin. Since August 2015 I have been converting this Ether into Bitcoin on two US-based cryptocurrency exchanges. I have then been converting the Bitcoin into US dollars on a New York-based exchange called Gemini (www.gemini,com), and transferring the US dollars to my Wells Fargo account. The total amount cashed out to the Wells Fargo account is currently $16,000 and will be less than $20,000 by the end of this month.
Do these transfers of US dollars count as "income from US sources" for the purpose of Forms 8843 and Form 1040NR-EZ, and what is the correct amount of tax to be paying on them if so?
Many thanks
Submitted: 7 months ago.
Category: Tax
Expert:  Robin D. replied 7 months ago.


As a non resident alien you are not required to report any income except US sourced income.

Bitcoin and other convertible virtual currencies fall outside of the definition of “currency,” which is limited to legal tender, and hence will be treated as property for U.S. tax purposes. As a result, income from convertible virtual currency transactions will be treated as either ordinary income or capital gain, as applicable. (Had the IRS treated virtual currency like foreign currency, transactions would have been taxed as ordinary income.)

The exchange is taxable as a sell of personal property unless there is a tax treaty between the US and your home country that says no. Most treaties provide for the exemption of gains from the sale or exchange of personal property.

Expert:  Robin D. replied 7 months ago.

Checking to see if you responded yet

Customer: replied 7 months ago.
Hi,Thanks - I'm assuming there isn't such a tax treaty between the US and the UK. Given the amount is less than $20,000 I'm assuming there is no tax to pay?
Expert:  Robin D. replied 7 months ago.

That is correct. Every treaty is different.

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