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I live and work outside of the USA but I invest in stock, how do I pay tax on the gains?

 
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I live and work outside of the USA but I invest in stock, how do I pay tax on the gains?

as a US expat, you are required to report your stock transactions on your 1040. Th free edition will not allow entering them. you have to upgrade to Premier.  if you use d a broker that provids a 1099-B you may be able to import it into your tax return otherwise you need to manually enter each transaction or prepare/get a worksheet in a format that is similar to form 8949 split between short and long-term transactions. then you can enter summary totals with the code letter M. you may be required to mail in your 1040 in which case you would attach the spreadsheet. if you can e-file, you use form 8453 to mail in the detail. read the instructions.

https://www.irs.gov/pub/irs-pdf/f8453.pdf 

 

if you are not provided with the details in US $s, the major difference is that you will need to convert purchases and sales. It is more accurate to use the spot rate on the date of purchase to convert the basis and the spot rate on the date of sale to convert the sales proceeds. This is also the IRS's preferred method of doing conversions. The Internal Revenue Service has no official exchange rate.

 

https://www.fiscal.treasury.gov/reports-statements/treasury-reporting-rates-exchange/historical.html 

you may also have foreign account reporting requirements

forms 8938 and Form 114

 

see this page

https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements 

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if you are a nonresident alien you file 1040-NR which Turbotax doesn't do

A non-resident alien is classified as a resident alien for tax purposes if they were physically present in the U.S. for 31 days during the current year and 183 days during a three-year period that includes the current year and the two years immediately before that.

 

Sprintax and others may do the 1040-NR. 

 

I can provide no help for completing this form. see the IRS instructions

https://www.irs.gov/pub/irs-pdf/i1040nr.pdf 

 

 

 

 

pk
Level 15
Level 15

I live and work outside of the USA but I invest in stock, how do I pay tax on the gains?

@annettemmonheim , agreeing with my colleague @Mike9241  on his excellent & complete response to your post, I would just like to add:

(a) the "expat" referred to in @Mike9241 's response  is generally referred in the code as US Person  and  includes US citizens and Residents ( GreenCard holders  only  when tax-home is foreign because SPT may not apply).

(b) depending on the country where your tax-home is, tax treaty assertions may apply including "resourced by treaty" for US sourced income taxed by both US and Foreign Taxing authority for purposes of Foreign Tax Credit  ( form 1116 ).

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