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equus

U.S. Capital Gains for NRAs trading options?

By equus, in General Board

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equus    30

equus
Posted

Does anyone know if the gains from our options trades are also subject to no U.S. capital gains tax, if you are a Non Resident Alien (like many of us are, I think)?

 

 

If you fall under the non-resident alien category and the only business you have in the U.S. is in investments (stocks, mutual funds, commodities) within a U.S. dollar-denominated brokerage firm or other agent, you are subject to the following tax guidelines. In terms of capital gains, non-resident aliens are subject to no U.S. capital gains tax, and no money will be withheld by the brokerage firm. This does not mean, however, that you can trade tax free - you will likely need to pay capital gains tax in your country of origin. In terms of dividends, non-resident aliens face a dividend tax rate of 30% on dividends paid out by U.S. companies. However, they are excluded from this tax if the dividends are paid by foreign companies or are interest-related dividends or short-term capital gain dividends. This 30% rate can also be lower depending on the treaty between your home country and the U.S., so it is important that you contact your brokerage firm to verify the rate.
http://www.investopedia.com/ask/answers/06/nonusresidenttax.asp

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