US taxes implications on US investments for non-US residents 美国税收对非美国税务居民在美国投资的影响

Many foreigners choose to invest in US stock market and other assets. There are many great opportunities but with US tax implications. Commonly income sources from these investments are – interests, dividends, capital gain or rental income

Generally, interest income received from the US will not be taxable in the US, but rather in the country of which you are a tax resident.

A NRA may invest in US stocks. If a US company pays you a dividend, you have to pay 30% tax on the dividend amount. This rate may be lower if a tax treaty is in place between the US and the NRA’s country.

Dividends received from foreign companies are not taxable in the US.

Capital gains
Capital gains from the sale of stocks and short-term capital gain distributions will not trigger any US tax liability. However, you will likely have to declare this income and pay tax in your home country.

Real estate
Gains from real property can be both from rental income and the eventual sale of the property after it appreciates. Both are taxable income in the US.

For rental income, you have two options:

(1) pay 30% tax of the gross rental income, with a withholding agent collecting the 30% tax, or

(2) make an election called a net basis election (“net election”) to treat income from the property as being effectively connected with a trade or business of the United States. Here you have to make quarterly estimated tax payments.

The net election is generally more beneficial. It enables you to pay taxes on the net profit, rather than the gross rental revenue.

Once you sell the real estate, a 15% tax must be withheld on the gain.













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