Do I need to pay taxes in the US as an Alien Resident for my Canadian stock capital gains
I will answer my own question. After calling my broker, they explained me this:
"IRS Pub 554 states (click to read full IRS doc):  ""Do not file a federal income tax return if you do not meet the filing requirements and are not due a refund. ... If you are a U.S. citizen or resident alien, you must file a return if your gross income for the year was at least the amount shown on the appropriate line in Table 1-1 below. "" You may not have wage income, but you will probably have interest, dividend, capital gains, or proceeds from sale of a house (and there is a special note that you must file in this case, even if you enjoy the exclusion for primary residence)" "The US withholding tax applies to stocks/ETFs purchased on the NYSE and other US-based exchanges. If you buy Cenovus on the TSE then you will not be charged this tax.  Your last sentence seems like you might be misunderstanding this tax though. If the tax applied, it would not cost you 15% on all your profits, it only applies to dividend yields. So if it pays you a 5% dividend, the tax costs you 0.75%. However, if you buy at $21.19 and sell at $26, then your capital gain is not subject to withholding taxes. It is however, subject to Canadian income tax (at 50% of the gain amount) when it's not sheltered in a TFSA or other registered account. The tax on the gains could easily amount to 16% of your profits, which is a much more significant cost. Therefore, having to pay a 0.75% withholding cost certainly does not ""defeat the purpose of the TFSA"" which is to shelter from Canadian income tax!" The United States taxes nonresident aliens on two types of income: First, a nonresident alien who is engaged in a trade or business in the United States is taxed on income that is effectively connected with that trade or business. Second, certain types of U.S.-source payments are subject to income tax withholding. The determination of when a nonresident alien is engaged in a U.S. trade or business is highly fact-specific and complex. However, keeping assets in a U.S. bank account should not be treated as a U.S. trade or business. A nonresident alien's interest income is generally subject to U.S. federal income tax withholding at a rate of 30 percent under Section 1441 of the tax code. Interest on bank deposits, however, benefit from an exception under Section 1441(c)(10), so long as that interest is not effectively connected with a U.S. trade or business. Even though no tax needs to be withheld on interest on a bank deposit, the bank should still report that interest each year to the IRS on Form 1042-S. The IRS can then send that information to the tax authority in Brazil. Please keep in mind that state and local tax rules are all different, and whether interest on the bank deposits is subject to state or local tax will depend on which state the bank is in. Also, the United States does tax nonresident aliens on wages paid from a U.S. company, if those wages are treated as U.S.-source income. Generally, wages are U.S.-source income if the employee provides services while physically present in the United States. There are a few exceptions to this rule, but they depend on the amount of wages and other factors that are specific to the employee's situation.  This is an area where you should really consult with a U.S. tax advisor before the employment starts. Maybe your company will pay for it? "In 2014 the IRS announced that it published guidance in Notice 2014-21. In that notice, the answer to the first question describes the general tax treatment of virtual currency: For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency. As it's property like any other, capital gains if and when you sell are taxed. As with any capital gains, you're taxed on the ""profit"" you made, that is the ""proceeds"" (how much you got when you sold) minus your ""basis"" (how much you paid to get the property that you sold). Until you sell, it's just an asset (like a house, or a share of stock, or a rare collectible card) that doesn't require any reporting. If your initial cryptocurrency acquisition was through mining, then this section of that Notice applies: Q-8: Does a taxpayer who “mines” virtual currency (for example, uses computer resources to validate Bitcoin transactions and maintain the public Bitcoin transaction ledger) realize gross income upon receipt of the virtual currency resulting from those activities? A-8: Yes, when a taxpayer successfully “mines” virtual currency, the fair market value of the virtual currency as of the date of receipt is includible in gross income. See Publication 525, Taxable and Nontaxable Income, for more information on taxable income. That is to say, when it was mined the market value of the amount generated should have been included in income (probably on either Line 21 Other Income, or on Schedule C if it's from your own business). At that point, the market value would also qualify as your basis. Though I doubt there'd be a whole lot of enforcement action for not amending your 2011 return to include $0.75. (Technically if you find a dollar bill on the street it should be included in income, but usually the government cares about bigger fish than that.) It sounds like your basis is close enough to zero that it's not worth trying to calculate a more accurate value. Since your basis couldn't be less than zero, there's no way that using zero as your basis would cause you to pay less tax than you ought, so the government won't have any objections to it.  One thing to be careful of is to document that your holdings qualify for long-term capital gains treatment (held longer than a year) if applicable. Also, as you're trading in multiple cryptocurrencies, each transaction may count as a ""sale"" of one kind followed by a ""purchase"" of the other kind, much like if you traded your Apple stock for Google stock. It's possible that ""1031 like kind exchange"" rules apply, and in June 2016 the American Institute of CPAs sent a letter asking about it (among other things), but as far as I know there's been no official IRS guidance on the matter. There are also some related questions here; see ""Do altcoin trades count as like-kind exchanges?"" and ""Assuming 1031 Doesn't Apply To Cryptocurrency Trading"". But if in fact those exchange rules do not apply and it is just considered a sale followed by a purchase, then you would need to report each exchange as a sale with that asset's basis (probably $0 for the initial one), and proceeds of the fair market value at the time, and then that same value would be the basis of the new asset you're purchasing. Using a $0 basis is how I treat my bitcoin sales, though I haven't dealt with other cryptocurrencies. As long as all the USD income is being reported when you get USD, I find it unlikely you'll run into a lot of trouble, even if you technically were supposed to report the individual transactions when they happened. Though, I'm not in charge of IRS enforcement, and I'm not aware of any high-profile cases, so it's hard to know anything for sure. Obviously, if there's a lot of money involved, you may want to involve a professional rather than random strangers on the Internet. You could also try contacting the IRS directly, as believe-it-or-not, their job is in fact helping you to comply with the tax laws correctly. Also, there are phone numbers at the end of Notice 2014-21 of people which might be able to provide further guidance, including this statement: The principal author of this notice is Keith A. Aqui of the Office of Associate Chief Counsel (Income Tax & Accounting). For further information about income tax issues addressed in this notice, please contact Mr. Aqui at (202) 317-4718" If you're a US citizen/resident - you pay taxes on your worldwide income regardless of where you live. The logic is that Americans generally don't agree to the view that there's more than one country in the world. If you're non-US person, not physically present in the US, and provide contract work for a US employer - you generally don't pay taxes in the US. The logic is that the US doesn't actually have any jurisdiction over that money, you didn't earn it in the US. That said, your employer might withheld tax and remit it to the IRS, and you'll have to chase them for refund. If you receive income from the US rental property or dividends from a US company - you pay income tax to the US on that income, and then bargain with your home tax authority on refunds of the difference between what you paid in the US and what you should have paid at home. You can also file non-resident tax return in the US to claim what you have paid in excess. The logic is that the money sourced in the US should be taxed in the US. You earned that money in the US. There are additional rules to more specific situation, and there are also bilateral treaties between countries (including a US-Canadian treaty) that supersede national laws. Bottom line, not only that each country has its own laws, there are also different laws for different situations, and if some of the international treaties apply to you - it further complicates the situation. If something is not clear - get a professional advice form a tax accountant licensed in the relevant jurisdictions (in your case - any of the US states, and the Canadian province where you live). This will work as intended, but there's another point to consider. In the US, the tax rate on proceeds from stock sales is higher for short term holdings, which are defined as held for less than one year. Both rates vary based on your income. Bracket numbers are for fiscal year 2014, filing as single. The difference between short and long term capital gains tax in the US is a minimum of ten percentage points, and works out to 15 percentage points on average. This is substantial. If you won't be reporting much income the year you move to the US (say because you only worked for a portion of the year) it is decidedly to your advantage to wait and sell the stocks in the US, to get that sweet 0% rate. At a minimum, you should hold the position for a year if you sell and rebuy, from a tax optimization perspective. Two caveats: This depends on the particular index, of course. Capital gains taxes occur when stock is sold (for a profit). This occurs less frequently in an index fund: Where an active manager frequently buys and sells stocks (after all, he wants to be active :-) ), the index fund only sells stocks when the particular stock leaves the index. For an index such as the S&P 500 this does not happen that often.  The more specific the criteria of the index fund, the more often the selling of stock and thus the need to pay capital gains taxes occurs. Yes (most likely). If you are exchanging investments for cash, you will have to pay tax on that - disregarding capital losses, capital loss carryovers, AGI thresholds, and other special rules (which there is no indication of in your question). You will have to calculate the gain on Schedule D, and report that as income on your 1040. This is the case whether you buy different or same stocks. "Yes. You do have to pay taxes in the UK as well but it depends on how much you have already been taxed in the US. http://taxaid.org.uk/situations/migrant-workernew-to-the-uk/income-from-abroad-arising-basis-vs-remittance-basis Say, you have to pay 20% tax in the UK for your earnings here. You ARE required to pay the same percentage on your foreign income as well. Now, if your ""home"" country already taxed you at 10% (for the sake of example), then you only need to pay the ""remaining"" 10% in the UK. However, the tax law in the UK does allow you to choose between ""arising"" basis and ""remittance"" basis on your income from the country you are domiciled in. What I have explained above is based on when income ""arises."" But the laws are complicated, and you are almost always better off by paying it on ""arising"" basis." "Q) Will I have to submit the accounts for the Swiss Business even though Im not on the payroll - and the business makes hardly any profit each year. I can of course get our accounts each year - BUT - they will be in Swiss German! You will have to submit on your income from the business.  The term ""partnership"" refers to a specific business entity type in the U.S.  I'm not sure if you're using it the same way.  In a partnership in the U.S. you pay income tax on your share of the partnership's income whether or not you actually receive income in your personal account.  There's not enough information here to know if that applies in your case. (In the U.S., the partnership itself does not pay income tax - It is a ""disregarded entity"" for tax purposes, with the tax liability passed through to the partners as individuals.) Q) Will I need to have this translated!? Is there any format/procedure to this!? Will it have to be translated by my Swiss accountants? - and if so - which parts of the documentation need to be translated!? As regards language, you will file a tax return on a U.S. form presumably in English.  You will not have to submit your account information on any other form, so the fact that your documentation is in German does not matter.  The only exception that comes to mind is that you could potentially get audited (just like anyone else filing taxes in the U.S.) in which case you might need to produce your documentation.  That situation is rare enough that I wouldn't worry about it though.  I'm not sure if they'd take it in German or force you to get a translation. I was told that if I sell the business (and property) after I aquire a greencard - that I will be liable to 15% tax of the profit I'd made. I also understand that any tax paid (on selling) in Switzerland will be deducted from the 15%!? Q) Is this correct!? The long-term capital gains rate is 15% for most people. (At very high incomes it is 20%.)  It sounds like you would qualify for long-term (held for greater than 1 year) capital gains in this case, although the details might matter. There is a foreign tax credit, but I'm not completely sure if it would apply in this case. (If forced to guess, I would say that it does.)  If you search for ""foreign tax credit"" and ""IRS"" you should get to the information that you need pretty quickly. I will effectively have ALL the paperwork for this - as we'll need to do the same in Switzerland. But again, it will be in Swiss German. Q) Would this be a problem if its presented in Swiss German!? Even in this case you will not need to submit any of your paperwork to the IRS, unless you get audited.  See earlier comments." You can always take deduction for foreign tax paid on Schedule A, or calculate foreign tax credit using form 1116. Credit is usually more beneficial, but in some cases you will be better of with a deduction. However, in very specific cases, you can claim the credit directly on your 1040 without using the form 1116. Look at the 1040 instructions for line 47: Exception.   You do not have to complete Form 1116 to take this credit   if all of the following apply. All of your foreign source gross income was from interest and dividends and all of that income and the foreign tax paid on it were   reported to you on Form 1099-INT, Form 1099-DIV, or Schedule K-1 (or   substitute statement). The total of your foreign taxes was not more than $300 (not more than $600 if married filing jointly). You held the stock or bonds on which the dividends or interest were paid for at least 16 days and were not obligated to pay these   amounts to someone else. You are not filing Form 4563 or excluding income from sources within Puerto Rico. All of your foreign taxes were: Legally owed and not eligible for a refund or reduced tax rate under a tax treaty, and Paid to countries that are recognized by the United States and do not support terrorism. For more details on these requirements, see the Instructions for   Form 1116. *Disclaimer: I am a tax accountant , but I am not your professional accountant or advocate (unless you have been in my office and signed a contract). This communication is not intended as tax advice, and no tax accountant / client relationship results. *Please consult your own tax accountant for tax advise.** A foreign citizen may form a limited liability company. In contrast, all profit distributions (called dividends) made by a C corporation are subject to double taxation. (Under US tax law, a nonresident alien may own shares in a C corporation, but may not own any shares in an S corporation.) For this reason, many foreign citizens form a limited liability company (LLC) instead of a C corporation A foreign citizen may be a corporate officer and/or director, but may not work/take part in any business decisions in the United States or receive a salary or compensation for services provided in the United States unless the foreign citizen has a work permit (either a green card or a special visa) issued by the United States. Basically, you should be looking at benefiting only from dividends/pass-through income but not salaries or compensations. "The other answer has mentioned ""factual resident"", and you have raised the existence of a U.S./Canada tax treaty in your comment, and provided a link to a page about determining residency. I'd like to highlight part of the first link: You are a factual resident of Canada for tax purposes if you keep   significant residential ties in Canada while living or travelling   outside the country. The term factual resident means that, although you left Canada, you   are still considered to be a resident of Canada for income tax   purposes. Notes If you have established ties in a country that Canada has a tax treaty   with and you are considered to be a resident of that country, but you   are otherwise a factual resident of Canada, meaning you maintain   significant residential ties with Canada, you may be considered a   deemed non-resident of Canada for tax purposes. [...] I'll emphasize that ""considered to be a resident of Canada for income tax purposes"" means you do need to file Canadian income tax returns. The Notes section does indicate the potential treaty exemption that you mentioned, but it is only a potential exemption. Note the emphasis (theirs, not mine) on the word ""may"" in the last paragraph above. Please don't assume ""may"" is necessarily favorable with respect to your situation. The other side of the ""may"" coin is ""may not"". The Determining your residency status page you mentioned in your comment says this: If you want the Canada Revenue Agency's opinion on your residency   status, complete either Form NR74, Determination of Residency Status   (Entering Canada) or Form NR73, Determination of Residency Status   (Leaving Canada), whichever applies, and send it to the International   and Ottawa Tax Services Office. To get the most accurate opinion,   provide as many details as possible on your form. So, given your ties to Canada, I would suggest that until and unless you have obtained an opinion from the Canada Revenue Agency on your tax status, you would be making a potentially unsafe assumption if you yourself elect not to file your Canadian income tax returns based on your own determination. You could end up liable for penalties and interest if you don't file while you are outside of Canada. Tax residency in Canada is not a simple topic. For instances, let's have a look at S5-F1-C1, Determining an Individual’s Residence Status. It's a long page, but here's one interesting piece:  1.44 The Courts have stated that holders of a United States Permanent Residence Card (otherwise referred to as a Green Card) are   considered to be resident in the United States for purposes of   paragraph 1 of the Residence article of the Canada-U.S. Tax   Convention. For further information, see the Federal Court of Appeal's   comments in Allchin v R, 2004 FCA 206, 2004 DTC 6468.   [...] ... whereas you are in the U.S. on a TN visa, intended to be temporary. So you wouldn't be exempt just on the basis of your visa and the existence of the treaty. The CRA would look at other circumstances. Consider the ""Centre of vital interests test"": Centre of vital interests test [...] “If the individual has a permanent home in both Contracting States, it   is necessary to look at the facts in order to ascertain with which of   the two States his personal and economic relations are closer. Thus,   regard will be had to his family and social relations, his   occupations, his political, cultural or other activities, his place of   business, the place from which he administers his property, etc. The   circumstances must be examined as a whole, but it is nevertheless   obvious that considerations based on the personal acts of the   individual must receive special attention. If a person who has a home   in one State sets up a second in the other State while retaining the   first, the fact that he retains the first in the environment where he   has always lived, where he has worked, and where he has his family and   possessions, can, together with other elements, go to demonstrate that   he has retained his centre of vital interests in the first State.” [emphasis on last sentence is mine] Anyway, I'm acquainted with somebody who left Canada for a few years to work abroad. They assumed that living in the other country for that length of time (>2 years) meant they were non-resident here and so did not have to file. Unfortunately, upon returning to Canada, the CRA deemed them to have been resident all that time based on significant ties maintained, and they subsequently owed many thousands of dollars in back taxes, penalties, and interest. If it were me in a similar situation, I would err on the side of caution and continue to file Canadian income taxes until I got a determination I could count on from the people that make the rules." ML is a brokerage firm. Tell them to sell. If you can't or don't know how to do it on-line - call them and do it over the phone. Your citizenship might come in effect when tax are withheld, you need to fill form W8-BEN if you haven't done so yet. If US taxes are withheld, you can file 1040NR to request refund, or get it credited against your local tax liabilities. As I recall, the gain for ISOs is considered ordinary income, and capital losses can only negate up to $3000 of this each year.  If you exercised and held the stock, you have ordinary income to the exercise price, and cap gain above that, if you hold the stock for two years.  EDIT - as noted below, this answer works for USians who found this question, but not for the OP who is Canadian, or at least asked a question at it relates to Canada's tax code.