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    narsiav's Avatar
    narsiav Posts: 1, Reputation: 1
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    #1

    May 3, 2007, 08:55 AM
    Dual-status or resident alien while leaving the US
    I've been in the US on an H1 for 5 years and left the US in Apr 2007. By the substantial presence test, I can file as a resident (married-filing-jointly). Alternatively, I can file as dual-status, and I am trying to decide which makes sense:

    Dual Status alien: Only income until Apr counts, but it appears that I have to file married-filing-separately, with no exemptions/dependents. Is this correct ?

    As a dual-status alien, how is income from stocks, received after Apr 2007 treated ? Is it not taxed in the US ?

    Resident: This will imply inclusion of rest-of the year indian salary, but due to the foreign tax credit, this might not be too much worse than not including it. In this case, all stock gain/loss through the entire year will count as income - is that correct ?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #2

    May 4, 2007, 12:57 AM
    If you left the U.S. in April 2007 for good, then you MUST file dual-satus.

    If you file dual status, you must file Married Filing Separately. You CANNOT claim the standard deduction (you claim itemized deductions instead), but you can claim your own personal exemption. You can also claim dependents who lived with you in the U.S. as long as THEIR personal exemptions are equal to or less than the income you earned in the U.S.

    The stock capital gains should NOT be taxable if they are realized after you left the U.S.

    As an expatriate dual-status alien, you CANNOT file as a resident alien status; that is NOT an option if you bare leaving the U.S.
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