Will I Pay Capital Gains Tax in the U.S. as a Nonresident?
When you sell property, stocks, or other assets in the U.S., you may owe Capital Gains Tax (CGT) on your profit — even as a nonresident.
Understanding when this tax applies, how much you’ll pay, and how to report it correctly is key to staying compliant with U.S. tax law and avoiding overpayment.
Here’s what you need to know.
💰 What Is Capital Gains Tax?
Capital Gains Tax is a tax on profits earned when you sell or dispose of an asset — such as:
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Stocks or shares
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Real estate
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Cryptocurrency
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Business assets or personal property
If you are a nonresident alien, you are generally taxed only on U.S.-sourced capital gains — meaning gains from assets connected to the United States.
📊 How Much Capital Gains Tax Will I Pay?
The standard U.S. Capital Gains Tax rate for nonresidents is 30% on U.S.-source net capital gains, but only if you were physically present in the U.S. for 183 days or more during the tax year.
If you lived outside the U.S. all year and sold U.S. investments like stocks, you usually won’t pay CGT in the U.S., though your home country may still tax the gain.
However, the exact rate depends on several factors:
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Tax treaties: Many countries have agreements with the U.S. that reduce or eliminate CGT for their residents.
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Income level: Higher overall income can mean a higher tax rate.
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State taxes: Some states add their own capital gains tax.
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Duration of stay: The 183-day rule often determines whether gains are taxable.
💼 Do Foreigners Pay Capital Gains Tax on U.S. Stocks?
If you sell U.S. stocks, bonds, or ETFs, your tax obligation depends on your residency duration and documentation.
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If you were in the U.S. for 183 days or more, you may owe 30% CGT.
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If you stayed less than 183 days, or provided Form W-8BEN to certify your foreign status, you’re typically exempt.
This makes U.S. stock investment attractive for many nonresidents — as capital gains are often tax-free if you don’t meet the 183-day rule.
🏦 Is Interest Considered Capital Gains?
No.
Interest income (like from savings or bonds) is treated as ordinary income, not capital gains, and is taxed at the regular nonresident rate.
🏥 Do I Pay Medicare Tax on Capital Gains?
Nonresidents generally do not pay Medicare or FICA taxes on capital gains or investment income.
These taxes mainly apply to U.S. citizens and residents.
🧾 How to Report Capital Gains on Your U.S. Tax Return
You must report all capital gains on your Form 1040-NR (Nonresident Tax Return).
If you sell property or assets, your income may also appear on Form 1042-S, using Income Codes 24–26.
Keep clear records of all transactions in case of an IRS audit.
🗺️ Do I Pay State Capital Gains Tax?
It depends on the state.
Some states (like California and New York) impose additional tax on capital gains, while others (like Florida and Texas) don’t tax them at all.
For example:
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Pennsylvania taxes capital gains at 3.07%, but does not tax nonresidents.
Always check local tax laws where your investment or property is located.
💡 Key Takeaways for Nonresidents
✅ You may owe U.S. CGT if you spend 183+ days in the country.
✅ U.S. tax treaties can reduce or eliminate capital gains tax.
✅ Interest is taxed separately as income, not as a capital gain.
✅ Always file Form 1040-NR to report capital gains correctly.
✅ Keep all documentation for IRS compliance.
🌍 Stay Tax Compliant and Maximize Your Refund
At J1 Summer Tax Back, we help international workers, investors, and nonresidents file accurate U.S. tax returns and recover overpaid tax.
Our mission is to make global tax compliance simple — ensuring you claim every refund and treaty benefit you’re entitled to.
Whether you sold stocks, earned dividends, or held U.S. investments — we’ll help you stay compliant and keep more of your money.