Hi,

I am a L1-B visa holder and I am currently staying in United States. I would like to know the tax implications of long term capital gains (Gains from Equities trading). I fall under the 15% tax bracket currently

1. What is the Long-term Capital Gain Tax Rate that I need to pay ?

2. If I move back to India within a year and sell my stocks after an year, what will be the Long-term Capital Gain Rate, considering that I don't have any income in United States ?

3. Once I move back to India , will I be allowed to trade through my existing account?

General Question

4. Once I move back to India , should I need to file my returns every year (considering that I don't have any income other than the capital gains)?

Any help will be highly appreciated. Thanks.

1) Probably 5%; may be 0%.

2) If you wait until you return to India, then sell, the treaty rate applies, which is 30%.

3) Yes, but given the 30% tax rate, it may make more sense to trade in an Indian account.

4) If you have capital gains through stock sales, you will need to file a return each year. If there is no taxable income, then no return is needed.

Capital gains in the U.S. by nonresident aliens that are not in the U.S. for 183 days during the year are not subject to U.S. tax at all and no U.S. tax return needs to be filed.

Can you provide a citation?

Code §§ 2(d) and 871(a)(2).

Thank you.

You are welcome.