On H1B,if I decide to transfer to US exchange,withdraw as USD some of my crypto which I bought on an international exchange when I was in my home country,how to file tax?

Forum|Forum|4 years ago
January 24, 2022
9 replies
51 views

Will it be considered as Short or Long term capital gains? And how would the profit/loss be determined and how much % would I have to pay tax? Filing as an employed single.

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pk_

Level 15

@chinmay-ashok is this a hypothetical question or have you already committed to these actions/scenario ? Are you already a resident for tax purposes ( 183 days in the country counting all the days in 2021, 1/3 days in 2020 and 1/6 days in 2019 ) ? If yes then the this is taxable gain/loss (?), if not then this is outside US tax purview. So please help with answers.

chinmay-ashokAuthor

Level 2

@pk12_2 For now it is a hypothetical question because I am planning on the best and correct way to perform the transaction this year(2022).

For 2021 I am not eligible for US tax purview as I haven't been here for 183 days in 2021.

And this would be a taxable gain transaction.

More info: I will be filing as employed single.

pk_

Level 15

@chinmay-ashok Namaste

1. Till you become a Resident for Tax purposes i.e. pass the Substantial Presence Test--SPT-- ( and be taxed on your world income ), you can keep all Non-US sourced income out of US taxation. Once you become a "Resident for Tax Purposes", you have to report and be taxed on your world income -- at that point whether the Crypto or any other assets are held in the US or elsewhere are all taxable to the US. Thus if you dispose off your assets and incur a gain/loss before passing the SPT, it is not a tax event for the US. On the other hand your home country ( India?) may tax these gains/losses. Also note that unlike India , US does not have an indexing regime for the asset-- thus the gain with respect to the original basis is taxable income.

2. While it may be easier to deal with assets that are locally reported/ controlled, all depends on your longer term plans -- if you expect to go back to your home country ( India?) then why change things -- taxwise there is no benefit from a US perspective.

I hope I am not missing your point. Is there more i can do for you ?

Namaste