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I am an Indian citizen and have been working as a Research Scientist on an H1B (lottery exempt) visa at a US university since November 2023. Prior to this, I was on a J-1 visa (Research Scholar) at a national lab in the US starting in 2018.

Before moving to the US, I was a consultant at a startup in Singapore and was awarded equity in the company. The equity vested over three years, and I am now eligible to cash it out. I would like to transfer the proceeds to my US bank account.

Since Singapore does not tax capital gains, I do not owe any taxes on this equity there.

I would like to know if I need to pay taxes on this equity in the US. If so, how should I report it to the IRS? Additionally, is receiving such income legal given my current H1B visa status? I am expecting to receive permanent residency in the US later this year. Should I wait to receive my green card before transferring the equity money from Singapore to my US bank account?

Regards,

RD

3 Answers 3

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I would like to know if I need to pay taxes on this equity in the US.

Yes, if you're a US tax resident - your worldwide income is taxed by the US.

If so, how should I report it to the IRS?

It goes on your Schedule D of the Federal tax return (form 1040), just like any other capital gains.

Additionally, is receiving such income legal given my current H1B visa status?

There are no restrictions on ability to transact with your personal assets in any of the US visas, including H1b.

Should I wait to receive my green card before transferring the equity money from Singapore to my US bank account?

I don't think it matters for green card whether you have money in Singapore or not.

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  • Very useful! Thank you.
    – r2d2
    Commented Jul 7 at 9:06
  • How do I tell the IRS that this is long-term (>1 year) capital gain and subjected to lower taxes. The equity was awarded to me in 2018 and got vested in 2021. So, capital gains are after an year.
    – r2d2
    Commented 2 days ago
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    As I said - schedule d
    – littleadv
    Commented 2 days ago
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Should I wait to receive my green card before transferring the equity money from Singapore to my US bank account?

No. The income is taxable at the moment you receive it, regardless of where in the world it happens.

Equity is complicated. Amount and timing of taxes depend a lot on the specifics of the equity (options vs grants, etc) type of vesting (cliff vesting vs monthly vesting, etc) and other details. There are certain "taxable" events in the life cycle of an equity (grant, vesting, exercise, sell) and the specifics of the equity determines what tax is due at which point. "Transfer to the US" itself is not a taxable event.

You may want to have a tax advisor take a look at your specific setup. It's possible that you should already have paid taxes on this in previous years and you would need to amend your past tax returns to sort this out.

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Remittance to the US of this income from Singapore is not taxable in the US. However take care of the FBAR & FATCA reporting you may need to do as a US resident.

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  • Thanks for your answer. This is capital gain. So, would I not be subjected to taxes in the US?
    – r2d2
    Commented 2 days ago
  • The sale transaction happened before moving to US. So if you are not a USC/GC then there is no question of US taxing you on this amount after your move to US. Commented 2 days ago

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