Hey, I am a student from mainland China. 2006 is my sixth year in US as a PhD student and I lost my non-resident status.

I bought some stocks in 2006 and failed to file W8BEN form with the stock trading company. It turns out they withhold 28% of the transaction value.

I am using Turbo tax to file my tax return (I filed an extension for year 2006). I got really confused when using it to file my tax return. Please help me with these following questions:

1. Am I still eligible for the 5000$ treaty exemption? When I use Turbo tax, how can I claim that? My 2006 taxable scholarship is 23000$. Shall I just enter 18000$ instead?

2. I have a 1099-B form from the stock trading company. They withhold a big chunk of my transaction stock value. How can I claim it back? Can I still claim tax exemption for stock, bonds, etc? How should I do it when file my tax return? With Turbotax?

thanks a lot for your kind help! I really really appreciate it!

1) In my opinion, you are NOT eligible for the $5,000 China treaty exemption. However, some have held that the wording of the U.S.-China treaty allows the $5,000 treaty exemption to be claimed for the duration of your stay, regardless of your residency status. If so, the way to claim it is to enter the $5,000 as a NEGATIVE number on line 21 of Form 1040 and cite the U.S.-China Tax Treaty.

2) Enter the withheld figure from the Form 1099-B on Line 63 of Form 1040. You are NOT exempt from doing the capital gains calculations on your stock transactions on Schedule D.

STRONGLY RECOMMEND you get professional tax help. If you want my help, contact me at the email address below.

Hey, Atlanta Tax Expert, thanks a lot for your kind response!

I would like to investigate the possibility of having professional help. But I have three questions need your inputs:

1. I am in China now and will stay for another a few months, how can I communicate with you if I need professional help.
2. I am still a student, I am not sure how much professional help would cost.
3. I really appreciate your response, but as for professional help, how can I protect my information such as SSN, etc.

Thanks a lot!

1) That is the beauty of email. This year I have prepared and filed returns electronically for clients in India, Taiwan and Germany and NEVER spoke with the person. All the communication was done via emai and, in one case, by fax.

2) Send me an email and I will give you a firm quote on my fee.

3) I use encrypted email and my computer has multiple firewalls and is password protected.