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Do I have to pay foreign taxes on capital gains from selling international stocks listed on U.S. stock exchanges (NYSE, AMEX and NASDAQ listed stocks only).

Forum|Forum|1 year ago
December 3, 2024
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Best answer by SusanY1

Maybe. For the most part, if you are trading inside of a US account, your brokerage firm will handle the payment of those taxes on your behalf and will provide the information in your 1099-B which will arrive in the first few months of the year. While, generally, the 1099-B form (like most 1099s) is required to be made available by 1/31 certain reporting items may not be final at that time. Foreign tax paid is often one of those items delayed until further in the year.

If you have a foreign-held account trading in US stocks you'll need to ask your brokerage firm or broker about what can be expected in terms of reporting of those gains.

When your 1099-B contains information that isn't final, this is usually made clear on the printed copies. (Often in the form of a "draft" watermark.) However, it won't always be obvious if you import 1099-B into the TurboTax software. For this reason, please be sure to inspect the printed or PDF form upon receipt and verify any imported data.

As TomD8 mentions above, if you do pay those taxes you may be entitled to take a credit on your US tax return for them following the instructions he kindly provided.

M

Mike9241

why not ask your broker?

M

miglothAuthor

I checked with Schwab - they only pays taxes on your behalf on dividends and interest, not on capital gains. That is all on the individual paying taxes.

SusanY1

I am aware of some countries that do tax capital gains on trades in stocks owned by foreign investors. These investors may have a tax obligation on the capital gains under the laws of those countries - but it is something that would need to be investigated on each individual investment based on the country of organization of the company and the amount of the gain (as some may fall below reporting requirements.)

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T

TomD8

Employee

Foreign countries have their own laws regarding taxation of stocks based in their country. If you pay such taxes, you may be able to claim a foreign tax credit on your U.S. tax return, so that you won't be double taxed. See this TurboTax help article:

https://turbotax.intuit.com/tax-tips/military/filing-irs-form-1116-to-claim-the-foreign-tax-credit/L2ODfqp89

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

SusanY1Answer

Maybe. For the most part, if you are trading inside of a US account, your brokerage firm will handle the payment of those taxes on your behalf and will provide the information in your 1099-B which will arrive in the first few months of the year. While, generally, the 1099-B form (like most 1099s) is required to be made available by 1/31 certain reporting items may not be final at that time. Foreign tax paid is often one of those items delayed until further in the year.

If you have a foreign-held account trading in US stocks you'll need to ask your brokerage firm or broker about what can be expected in terms of reporting of those gains.

When your 1099-B contains information that isn't final, this is usually made clear on the printed copies. (Often in the form of a "draft" watermark.) However, it won't always be obvious if you import 1099-B into the TurboTax software. For this reason, please be sure to inspect the printed or PDF form upon receipt and verify any imported data.

As TomD8 mentions above, if you do pay those taxes you may be entitled to take a credit on your US tax return for them following the instructions he kindly provided.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"