Thank you so much for answering this question @pk! To give you more information:
- I was on an H1-B visa and quit my job when I left the US. This means my H1-B visa expired/became invalid after the given grace period one gets to change jobs between an H1-B (which I did not used as I had no intention of looking for other jobs).
- I am currently in the UK and I am an Ecuadorian citizen. It is worth pointing out that I am not working in the UK but I am a student (and will be one here for the foreseeable future). Nevertheless, I spent more than 183 days physically in the UK during its 2020-2021 tax year which means I am both a resident here and liable for paying taxes here.
- I don't own any property (I have only really owned a car that I sold before leaving) or have had any family in the US. The only thing I still have there is my bank account as it is very convenient to keep US dollars rather than pounds for me (as both Ecuador and the UK use US dollars).
- One more thing: Although I was renting an apartment in the US all of January-September, because of COVID I was physically in the US only for 143 days in 2020. This is something I can prove easily using my I-94 which shows days of entry and exit in the US. I believe this is important when claiming that capital gains are not taxable when I file my 1040-NR.
I see that it may be more beneficial to file as a full-year resident due to the standard deduction and tax treaties between the UK and the US. My only rationale for going this way is that I held the shares I sold in the US for less than a year and therefore the short-term tax I would have to pay makes it significantly worse.
As you mentioned, I did that and prepared my 1040 using TurboTax with itemized deductions and then I prepared a 1040-NR manually where I reported no taxable US sourced income as during those months my only income came from those capitals gains I mentioned. I will obviously be paying taxes for those gains here in the UK.
Please let me know if any more details would be needed to answer this question or if you believe there was some misunderstanding in the return I just described. Thanks so much for your time and help!
