After I moved out of US and am non resident I have still not moved my stocks out of US brokerage. I tried opening international brokerage and signed W8 BEN form. Is it ok

Forum|Forum|5 years ago
March 29, 2021
1 reply
9 views

Is it ok to hold stocks in US and take sometime to transfer it out. After I filled W8-Ben from then on all income must be reported in resident country right?

TurboTax Online

ToddL99

Level 13

Yes, it is perfectly OK to hold stocks in the US, and you do not ever need to transfer them out. If you are not a U.S. citizen or permanent resident, you are only subject to your home country's tax on investment income.

W8-BEN is not required for investment holdings (e.g. stocks, mutual funds), but is required for:

Interest (including certain original issue discount (OID));
Dividends;
Rents;
Royalties;
Premiums;
Annuities;
Compensation for, or in expectation of, services performed;
Substitute payments in a securities lending transaction; or
Other fixed or determinable annual or periodical gains, profits, or income.

spirit247iAuthor

Level 2

1. As you stated its ok to hold stocks in US brokerage and I am not obligated to move it out.

a) Does my visa status affect this at all like whether my work permit expires in US?

b) The reason I am looking to move out of US brokerage is my CA told me if I earn through US brokerage, I need to keep filing tax in US as non resident every year.

c) I was hoping after opening Canadian brokerage and signing W8 BEN I can continue US stocks trading but only have to file in 1 country.

2. Still trying to understand the point of W8-BEN form.

I became canada resident in Dec 2020 and had not ever filled W8-BEN form till March 2021 (when I opened new Canada brokerage account).

a) Now in Dec 2020 - my only earning was US stock income via US brokerage.

So for Dec 2020 month, in Canada, without W8-BEN form ever filled, can I file my Canadian tax and then show these US stock earnings as tax credit there?

b) In March 2021 I have opened Canadian brokerage & signed W8-BEN - so from this point on I can report all US earnings in Canada only or income earned through US brokerage between Jan - March 2021 must again be filed in US as non resident return?

ErnieS0

Level 15

1, You are correct. If you keep your U.S. brokerage account, you will have to file a U.S. nonresident income tax return. Dividend income is taxable. Interest and capital gains would be taxable to Canada only.

Your visa is not related to whether you have to file a U.S. tax return. That’s solely dependent on your U.S source income. You can live in Canada and still have to file a U.S. tax return if you have U.S. source income.

Nonresident Aliens - Source of Income

2. Check with your broker to see whether you can trade U.S. stocks through a Canadian brokerage account. Form W-8BEN is for U.S. accounts. The IRS requires 30% tax withholding on income received on interest, dividends and other types of income. Form W8BEN reduces the withholding requirement to the applicable tax treaty amount.

Form W8Ben is not related to where you report your income. You will still have to file a U.S. tax return if you have U.S. source income, whether you signed a Form W8BEN or not. Form W8BEn means less U.S. tax is withheld on income earned in your U.S brokerage account.

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