capital gain tax

[lucky_winner]

I've just got the immigration visa and I am planning to go to US to activate my GC by Sept.
There's no capital gain tax in my home country. But to my understanding, once I activate my GC, I will need to file captial gain tax. So should I release all my asset and hold cash before I activate my GC? I'm holding some stocks and it's like 50% up from the time I bought it 3 years ago....

 

[leongsce]

I've just got the immigration visa and I am planning to go to US to activate my GC by Sept.
There's no capital gain tax in my home country. But to my understanding, once I activate my GC, I will need to file captial gain tax. So should I release all my asset and hold cash before I activate my GC? I'm holding some stocks and it's like 50% up from the time I bought it 3 years ago....

luckywinner,
you pay capital gains tax only if your gains are generated in the us. your assets in your home country are not subject to such taxes. unless you are speaking of holding stocks of companies traded in america. then in this case, as a resident, you will be taxed for your gains. before, when you bought these stocks your broker would have you sign a form (forgot the number) that specifies you as a foreigner. the gains you made in your stocks will only be taxed once and normally at your home country.
since i am not sure whether you refer to your stockholdings or fixed assets, i will assume that when you mention assets you mean stocks. i will advise that you liquidate your stocks now since you will stand to gain 50% and not get taxed. when you arrive here you can always buy again. the time is pretty good to pick up some good buys in the market now.

 

[lucky_winner]

Hi Leongsce,
Really? Actually I have got 2 properties here and I know I can claim one as my primary residence and there's sort of exemptions for capital gain tax, I'm thinking whether I should sell the other one. For stocks, they are not stocks listed in US. And buy the time I bought them, I was not US LPR. I guess I need to sign a W8 form if I buy stocks again in future.

 

[leongsce]

Hi Leongsce,
Really? Actually I have got 2 properties here and I know I can claim one as my primary residence and there's sort of exemptions for capital gain tax, I'm thinking whether I should sell the other one. For stocks, they are not stocks listed in US. And buy the time I bought them, I was not US LPR. I guess I need to sign a W8 form if I buy stocks again in future.

now i remember, it's the w8. you will not need to sign the w8 once you are a legal pr. you will be subject to us taxes. the w8 are meant for foreigners who have investments in the us and will be exempt from certain taxes here but will be taxed in their home country.

as for your houses, if you intend to migrate here permanently, i will suggest liquidating at least one of them now ... since you will not pay cap gains tax in your home country (same like mine). once you are a pr in the usa, you will have to declare to the irs of your foreign asset holdings and these houses will probably be taxed on cap gains if sold. i am not an accountant but i think it may well be that way. i liquidated all my houses before i got my gc too. if you are a pr, i am not sure whether you will be able to claim a foreign residence as a primary residence. you will be better off purchasing a property here, now that the prices are in our favor. spend time shopping around and buy in areas where market values are traditionally stable. i did that. so far the value of my property has not dropped below my purchase price but it has not increased significantly either (can't expect too much upward movement from the real estate market here at least for the next 2 years).
you should sell your stocks and save on the cap gains tax before you become lpr.
once you are a lpr, you will have to abide by irs rules and declare your assets.
i suggest you think carefully and take action before you officially become a lpr.
good luck.

 

[bentlebee]

It also comes down to the time frame of owning the property. If you don't own it for like 2 yrs, it will also be taxed for capital gains....I'm not sure about the exact time frame but i know there is a time frame for primary residences as well, or how many in how many yrs.