Let's say I sell some US stocks through my brokerage firm this year (2023) as a non-resident alien and incur long term capital losses (LTCL). Now, let's assume that I become a US resident (for tax purposes) in the year 2025, and make some long term capital gains (LTCG) in the same year.
Question: Would I be able to offset the losses incurred in 2023 against these gains made in 2025?
PS : There's no tax on capital gains through stocks/mfs/etfs imposed on non-resident aliens. So, I'm not sure how my capital losses in 2023 would be recorded with the IRS.
@tbudd I am going out on a limb as I really do not know the answer.
However, if you are confident that the gain is not reportable as a non-resident alien. the IRS is unlikely to give you a benefit of the loss into the future when you are a resident alien.
as a NRA, if you are not required to pay tax on the gain, I wouldn't beleive that a loss will get you a benefit.
You can't have your cake and eat it too.
" as a NRA, if you are not required to pay tax on the gain, I wouldn't beleive that a loss will get you a benefit. "
That's exactly how I thought too. However, notice that an NRA is potentially (depending on the country of current residency) subject to taxes on the capital gains where they are tax resident for the year under consideration. So, in this example, the NRA would have been subject to taxes in 2023 on the capital gains (if there were any, besides the losses) in their country of tax residency. But then, because the NRA became tax resident in the US in 2025, should the losses sustained in 2023 just disappear into void? I think the NRA is a victim of the situation here. Maybe if the NRA moves back to their home country or the country they were tax resident while incurring the losses in a future year, say 2028, they could readjust the potential capital gains in that year against these 2023 losses.
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