Can I trade stocks on Robin hood even if I've left the US and pay taxes regularly? I still have a SSN, a US bank account but now I'm not a resident nor a VISA holder

[KarenJ2]

You do not need to be an American citizen or resident to invest in the US stock market.

[alberto-martini]

Thanks. At the time I sell stocks, how can I pay taxes on these profits without being a US resident anymore?

[KarenJ2]

In general, non-residents are not taxed on net capital gains, except for any dispositions of a US real property interest and sales of assets used in a US trade or business.

[alberto-martini]

Thanks again Karen. From a practical standpoint if I trade stocks through Robin hood, can I still pay taxes using Turbotax when they provide me with the tax form? (I want to make sure that what I'm doing is totally legit)

[LinaJ2020 · Accepted solution]

Yes, you can file and pay taxes by using TurboTax for the US residency portion.  

Please continue to read:

Per IRS, if you left the U.S. to re-establish your residence in your home country after you met the Substantial Presence Test SPT, your residency termination date is generally December 31 of the year you leave. (12/31/2019) You are therefore considered a U.S. resident for the entire calendar year. You will be filing a Form 1040 for the whole year report worldwide income.  You can use TurboTax to file.

However, you can claim to be a dual-status alien for the year you leave (2019) if you meet the following conditions:

• You are not a U.S. resident during any part of the following year (2020), and

• You establish that, after you left the U.S., your tax home was a foreign country and you had a closer connection to that country. 

Also, see IRS resources here: Last year residency

If you meet these conditions, you have the option to determine your residency termination date as the last day in the calendar year that you were physically present in the United States.  You will be a dual-status alien for that year.  You will then be filing a Form 1040 as a resident report worldwide income, and Form 1040-NR for the rest of the year as a nonresident report only US source income.  As TurboTax does not support any nonresident tax forms, you are advised to use Sprintax to file your Form 1040NR. 

You cannot e-fie with TurboTax but can use the program to prepare your resident tax forms i.e. Form 1040.  You will mail both forms together with any required documentation to the IRS location at Austin TX.

To see detailed information:

DualStatus

under What and Where To File for a Dual-Status Year

@alberto-martini

[alberto-martini]

Thank you very much Lina. Last question: if I buy stocks now by using a US platform (with my SSN) and I sell assets next year or in two years or so - how can I pay taxes on the money that I would potentially earn through selling stocks (when I won't be anymore a US resident)? Is it possible through Sprintax?

[KarenJ2]

Yes, if you wish to pay taxes on the stock gains as a nonresident in a year or two, you can use Sprintax to file a nonresident return. As a US nonresident, you are only subject to capital gains tax if you are in the US 183 days or more during the year.

How to Save US Taxes for Nonresidents

KPMG US Taxation of Foreign Citizens

[alberto-martini]

Just a recap: if I'm not in the States at all, at the time I sell the stocks, assuming a potential gain, don't I need to file for taxes?

[KarenJ2]

Yes.  You do not want to make an investment is in real estate investment trust, or REIT..  Please see more information:

Bankrate and nonresident investors

Publication 519

[Pete35]

What about dividend gains? And gains through REIT stocks? In such case, is it still possible to report tax using Sprintax as a non resident alien assuming that he stayed 0 days in the states during tax year?

[ErnieS0]

Yes. Use Sprintax.com if you are a U.S. nonresident. You would file a Form 1040-NR.

Nonresident aliens are generally subject to U.S. income tax only on their U.S. source income.

Gains are not taxable until you sell an investment. Capital gains are generally not taxable to nonresidents.

Dividends paid by U.S companies are taxable along with dividends paid by a foreign corporation is U.S. source if at least 25% of the corporation's gross income is effectively connected with a U.S. trade or business for the 3 tax years before the year in which the dividends are declared.

See Nonresident Aliens - Source of Income

[jesse8239]

why is it that if I am a American citizen with a new US military mortgage loan listed as my primary residence. Robinhood banned me from trading because I am temporarily stuck in the philippines because of covid. I cannot fly sick. they said I am not considered a us resident since I am in a hotel overseas??? this country is not on the banned last. and I am a us resident with proof.   they said they do not have to explain to me the rules even though I copy and pasted their rules and sent it to them

[Pete35]

Did you already have an account and was banned? Or were you not able to create an account?

[DaveF1006]

This is an issue strictly with Robinhood. You need to contact them for more information.