First, thanks for the help! I am a phd student in the US who is filing yearly tax returns as a NON-RESIDENT ALIEN. As I understand, after 5 years usually, I start filing tax return as a RESIDENT ALIEN, and all the resident tax rules will apply to me.

My question is - if I purchased a stock while filing as a NON-RESIDENT ALIEN, and sold it (with a capital gain) while already filing as a RESIDENT-ALIEN, what tax rate will apply to the capital gain? (given that I held the stock long term - meaning more than a year)

I know that as a NON-RESIDENT, a 30% flat tax rate applies to capital gains (saw it in previous tax returns...), but as a resident, given its a long-term capital gain, only a 15% tax rate applies.

So which tax rules apply? The ones when I purchased the stock, or the current ones when I am selling it?

Also, if some of you guys know anything about status of phd students - If I study here for 5 years and then take a job in the US, so I stay in the US for more than 5 years (Where I stay in the US each full year, and not part-time), I understand that after 5 years I begin filing tax returns as a RESIDENT ALIEN, correct?

Thanks a lot!!

  • 2
    You don't have a capital gain until the day you sell the stock for profit, and your status as of the end of that year is what matters as far as what capital gains tax you have to pay. – Dilip Sarwate Aug 14 at 12:00
  • As Dilip says, the tax rules at the time you sell are what (will) matter. Those may be different than what they are today. Those (future) rules may (or may not) be different depending on your status when you bought the shares (I've no idea whether this is the case today, but whatever today's rules are, the future ones may be different). – TripeHound Aug 14 at 13:28

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