US tax returns for a resident - No US income and indian shares
"I'm assuming that by saying ""I'm a US resident now"" you're referring to the residency determination for tax purposes. Should I file a return in the US even though there is no income here ? Yes. US taxes its residents for tax purposes (which is not the same as residents for immigration or other purposes) on worldwide income. If yes, do I get credits for the taxes I paid in India. What form   would I need to submit for the same ? I am assuming this form has to   be issued by IT Dept in India or the employer in India ? The IRS doesn't require you to submit your Indian tax return with your US tax return, however they may ask for it later if your US tax return comes under examination. Generally, you claim foreign tax credits using form 1116 attached to your tax return. Specifically for India there may also be some clause in the Indo-US tax treaty that might be relevant to you. Treaty claims are made using form 8833 attached to your tax return, and I suggest having a professional (EA/CPA licensed in your State) prepare such a return. Although no stock transactions were done last year, should I still   declare the value of total stocks I own ? If so what is an approx. tax   rate or the maximum tax rate. Yes, this is done using form 8938 attached to your tax return and also form 114 (FBAR) filed separately with FinCEN. Pay attention: the forms are very similar with regard to the information you provide on them, but they go to different agencies and have different filing requirements and penalties for non-compliance. As to tax rates - that depends on the types of stocks and how you decide to  treat them. Generally, the tax rate for PFIC is very high, so that if any of your stocks are classified as PFIC - you'd better talk to a professional tax adviser (EA/CPA licensed in your State) about how to deal with them. Non-PFIC stocks are dealt with the same as if they were in the US, unless you match certain criteria described in the instructions to form 5471 (then a different set of rules apply, talk to a licensed tax adviser). I will be transferring most of my stock to my father this year, will   this need to be declared ? Yes, using form 709. Gift tax may be due. Talk to a licensed tax adviser (EA/CPA licensed in your State). I have an apartment in India this year, will this need to be declared   or only when I sell the same later on ? If there's no income from it - then no (assuming you own it directly in your own name, for indirect ownership - yes, you do), but when you sell you will have to declare the sale and pay tax on the gains. Again, treaty may come into play, talk to a tax adviser. Also, be aware of Section 121 exclusion which may make it more beneficial for you to sell earlier."
"All the other answers posted thus far discuss matters from the perspective of US tax laws and are unanimous in declaring that what the OP wants to do is indeed a very bad idea. I fully agree: it is a bad idea from the perspective of US tax laws, and is likely a bad idea from the perspective of Indian tax laws too, but what the OP wants to do is  (or used to be) common practice in India. In more recent times, India has created a Permanent Account Number (""PAN number"") for each taxpayer for income tax purposes, and each bank account or investment must have the owner's (or first-named owner's, in case of a joint account) PAN number associated with it.  This most likely has decreased the popularity of such arrangements, or has led to new twists being used. The OP has not indicated the residence and citizenship of his family (or his own status for that matter), but if they are all Indian citizens resident in India and are Hindus, then there might be one mechanism for doing what the OP wants to do: apply for a PAN number in the name of the Hindu Undivided Family and use this number to carry out the investments in the name of the Hindu Undivided Family.  (There presumably are similar statuses for undivided families for other religions, but I am not familiar with them). There are lots of matters here which are more legal questions than personal finance questions: e.g. if the OP is a US tax resident, then the family presumably will not be able to claim Hindu Undivided Family status since the OP has been divided from the family for tax purposes (or so I think). Even if HUF status is available, the OP might not be able to act as the pater familias while his father is alive, and so on.  Consultation with tax lawyers, not just chartered accountants, in India is certainly advisable." I keep visiting Dubai Not sure what kind of work it is, assuming it regular job. For the period mentioned above I was out of India for more than 182 days,  If you were out of India for more than 182 days in a given financial year then you would NRI for tax purposes. till date I have not transferred any money from Dubai to my India account. Whether you have transferred the money or not is not relevant for tax purposes. Your status [NRI / Resident] is relevant. Do I need to declare the income I have earned in Dubai? No you are not required to as your status is NRI. You are required to file a return on the income [Salary/Interest/gains/etc] accruing in India. Do I need to change my residential status ? Not sure where you are wanting to change this. Will the income I have earned in Dubai is taxable ? As you are NRI, the income earned outside of India is not taxable in India. From a tax point of view, it does not matter whether you keep the funds in Dubai or transfer it back to India. Edit: The Income Tax rules are not very clear if your wife can claim for her father-in-law. Best consult a CA. For quite a few regulations, Wife's father-in-law are treated at par with father. Assuming that your friend is residing in India, any money that he returns to you cannot be deposited into your NRE (NonResident External) account; it must go into your NRO (NonResident Ordinary) account. You don't have an NRO account, only ordinary savings accounts in India that you established before leaving the country and becoming an NRI (NonResident Indian) ? Well, you are in violation of FEMA regulations and need to convert all those ordinary savings accounts into NRO accounts as soon as possible. Your bank will help you in doing this (by letting you hold ordinary accounts while you have NRI status, the bank too is in violation of FEMA regulations). With regard to taxation, unless you have created a paper trail by documenting the money sent to the builder as a loan to your friend, the entire amount (less INR 50,000 exemption) that your friend will return to you will be considered a gift from your friend to you, and it will be taxable income to you in India, and possibly taxable income to you in your country of residence, though there may be tax treaties that will let you pay taxes in one country only. If you do have a paper trail, then only the excess of what your friend returns to you is interest income to you; the bulk is just repayment of the loan principal, and is nontaxable. If you are residing in the US, I do hope that you have reported the fact that you had foreign bank account(s) totaling more than US$10K in value to the IRS and the US Treasury as per FBAR regulations; because if not, you have many more tax issues to worry about. The fines for not filing these reports are onerous. In any case you need a CA. Please consult one. I am selling a plot of land that I own in India. This would be treated as capital gains event and you would owe taxes on the gains. I would like to purchase an apartment in India for my parents use. Yes you can. You maybe able to offset some gains on land sale against the apartment.  Would like to gift part the money (about INR 20 lakhs) towards my US born son's college education in the US. As you are NRI; Under FEMA, you can transfer funds from your NRO account to US. A form 15CAB and 15CB need to be submitted to the bank to enable transer. "Tax US corporate ""persons (citizens)"" under the same regime as US human persons/citizens, i.e., file/pay taxes on all income earned annually with deductions for foreign taxes paid.  Problem solved for both shareholders and governments.  [US Citizens and Resident Aliens Abroad - Filing Requirements](https://www.irs.gov/individuals/international-taxpayers/us-citizens-and-resident-aliens-abroad-filing-requirements)  &gt;If you are a U.S. citizen or resident alien living or traveling outside the United States, **you generally are required to file income tax returns, estate tax returns, and gift tax returns and pay estimated tax in the same way as those residing in the United States.**  Thing is, we know solving this isn't the point.  It is to misdirect and talk about everything, but the actual issues, i.e., the discrepancy between tax regimes applied to persons and the massive inequality it creates in tax responsibility.  Because that would lead to the simple solutions that the populace need/crave.  My guess is most US human persons would LOVE to pay taxes only on what was left AFTER they covered their expenses." "I believe you have to file a tax return, because state tax refund is considered income effectively connected with US trade or business, and the 1040NR instructions section ""Who Must File"" includes people who were engaged in trade or business in the US and had a gross income. You won't end up having to pay any taxes as the income is less than your personal exemption of $4050." You haven't indicated where the funds are held. They should ideally be held in NRO account. If you haven't, have this done ASAP. Once the funds are in NRO account, you can repatriate this outside of India subject to a limit of 1 million USD. A CA certificate is required. Please contact your Indian Bank and they should be able to guide you. There are no tax implications of this in US as much as I know, someone else may post the US tax aspect. Yes. You may be subjected to the US gift tax (if you transfer to anyone other than your legally married spouse or yourself). The receivers will have to deal with the Indian tax laws, which I'm not familiar with. Is this possible and will it have the intended effect? From the US tax perspective, it most definitely is and will. Is my plan not very similar to Wash Sale? Yes, except that wash sale rules apply for losses, not gains. In any case, since you're not a US tax resident, the US wash sale rules won't apply to you. non-resident aliens to the US do not pay capital gains on US products. You pay tax in your home country if you have done a taxable event in your country. http://www.investopedia.com/ask/answers/06/nonusresidenttax.asp#axzz1mQDut9Ru but if you hold dividends, you are subject to US dividend tax. The UK-US treaty should touch on that though. "For the financial year 1 April 2014 to 31 March 2015, as you have [or will be] spent more than 182 days outside India, you would be treated as ""Non-Resident"" [NRI] for tax purposes.  If you are NRI  Show my Kuwaiti Income in my Income Tax Return?   Pay any tax on the money that I am sending to savings bank accounts in India You need not Pay Tax on your income outside India. i.e. there is no tax obligation created. It cannot be declared in Tax Returns. However any interest you earn on the money deposited in India would be subject to taxes. Will my wife have to show the income and/or pay the income tax on the money that I am sending to her savings bank accounts? There is no Income to you wife [Income is something you earn] and hence its out of scope from Income Tax act. It would fall under gift tax rules. As per Gift Tax one can transfer unlimited funds between close relatives. Hence there is No tax. It would be better if you open an NRO/NRE account and transfer funds into that account" Does my prior answer here to a slightly different question help at all? Are there capital gains taxes or dividend taxes if I invest in the U.S. stock market from outside of the country? As per Indian tax laws; income, expense, gain and loss constitute the basic pillars of every individual’s economic life. There are very few cases under which this new 'income' is non taxable. Based on the circumstances, you might have to pay capital gains tax. First, yes, your LLC has to file annual taxes to the US government.  All US companies do, regardless of where their owners live.  Second, you will also probably be liable to personally file a return in the US and unless the US has a tax treaty with India (which I don't believe it does) you may end up paying taxes on your same income to both countries.  Finally, opening a US bank account as a foreign citizen can be very tricky. You need to talk to a US accountant who is familiar with Indian & US laws. "Can I claim a 20% of the interest paid over the period of Oct/2015 through Mar/2017 (18 months) when I file for IT returns this year in Mar/2017? Yes you can. Does my name not being the first name affect my eligibility of claiming the relief? No you can claim relief. Joint owners need to file a declaration on the quantum of relief claimed. Both can't claim 100%. Does that mean I my claiming the 20% relief on interest (and the remaining 80% over subsequent years) is in effect moot as my ""taxable"" income cannot go negative (meaning the govt cannot/will not return some money I have paid as IT in prior years)? If you have no other income on which tax is payable; then Yes it is irrelevant. Does that mean as long as I continue to work in the US (already having become a NRI), have little or no income in India, I cannot claim any future relief regarding the principal or interest? Yes that is right."