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Author: megeranski Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Cap Gains vs. Income tax Date: 10/18/1998 3:36 AM
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this feels like a very basic, silly question, but here goes. bear with me.

I'm in a situation where i do not have to pay any income tax ( i live overseas and non of my income comes from nor is generated in the US)

I guess i am not exempt from capital gains tax, though, huh? (how i wish, but i'm hoping that you'll say i don't have to pay cap gains!!! :-) i can hope, can't i??

what about paying tax on interest earned?

any othere things that i don't know enough to ask about?

thanks for taking the time to help me on this one!

Kind Regards,
megeranski
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Author: cswee One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5832 of 121061
Subject: Re: Cap Gains vs. Income tax Date: 10/18/1998 6:20 AM
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Several considerations on this one and you should check with your accountant.

US citizens and residents are taxed on world wide income although there is usually an agreement which you can use so as not to pay double tax. You need to ascertain your tax domicile. There are tests (e.g. physical presence, residency) which determine whether you can use foreign exclusions or foreign tax credits.

Even after all that you do not have a US tax liability, you should still file, especially if you are a resident alien temporarily away.

Hope this helps.
Chris

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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5850 of 121061
Subject: Re: Cap Gains vs. Income tax Date: 10/19/1998 11:48 PM
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[[this feels like a very basic, silly question, but here goes. bear with me.]]

There are no silly questions...only silly answers.

[[ I'm in a situation where i do not have to pay any income tax ( i live overseas and non of my income
comes from nor is generated in the US)]]

Makes no difference. If you are a US citizen, you are taxed on WORLDWIDE income. If you are a non-citizen, your tax issues will depend if you are a resident alien or a non-resident. Remember that just because you "live" overseas doesn't necessarily mean that you are not a US citizen, eh?

[[ I guess i am not exempt from capital gains tax, though, huh? (how i wish, but i'm hoping that you'll
say i don't have to pay cap gains!!! :-) i can hope, can't i??]]

Again, this will depend upon your citizenship and residency status. So until you can clear that up for me, I can't really help you with the rules, or point you to additional reference material.

[[ what about paying tax on interest earned?

any othere things that i don't know enough to ask about?

thanks for taking the time to help me on this one!]]

Again, I really can't go any deeper into your questions until I know your citizenship and residency status. If you'll provide me with that information, I'll be glad to try and help you.

TMF Taxes
Roy

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Author: megeranski Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5867 of 121061
Subject: Re: Cap Gains vs. Income tax Date: 10/20/1998 4:08 AM
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Again, I really can't go any deeper into your questions until I know your citizenship and residency status. If you'll provide me with that information, I'll be glad to try and help you.

*sigh*. i'm so sorry for not including this info. i suppose i should write these messages more in the morning, when i'm a bit more alert.

I'm a US citizen (born in Detroit!) with US residency (i guess - this leads to another question of which state i am a resident in. i have a driver's liscence in MO, i am registered to vote in MI, the last place i lived in was HI. what a mess!)

i am living overseas on a visitors visa as a student, so have no residency status where i live.

wow. what a mouthful!

-megeranski



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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5876 of 121061
Subject: Re: Cap Gains vs. Income tax Date: 10/20/1998 12:22 PM
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[[I'm a US citizen (born in Detroit!) with US residency (i guess - this leads to another question of
which state i am a resident in. i have a driver's liscence in MO, i am registered to vote in MI, the last
place i lived in was HI. what a mess!)]]

Since you are a US citizen, you are required to report and pay US taxes on WORLDWIDE income...not just income earned in the US.

You really, REALLY need to read IRS Publication 54 (Tax Guide for US Citizens and Resident Aliens Abroad). That'll give you the rules regarding how to file, what to file, when to file, and other rules and regulations.

Once you have waded through Pub 54, if you have any other specific questions, feel free to post 'em here.

TMF Taxes
Roy

Want to learn more about taxes and investing? Then we have a deal for you!! The Motley Fool Investment Tax Guide is now available through Fool Mart. Be the first one on your block to own this masterpiece. There is still time available to do that tax planning (and tax saving) before the end of the year. So just click on this link (http://www.foolmart.com/market/product.asp?pfid=MF+013+I) to read more about this amazing collection of tax information. (Apologies for the shameless plug…but it is a pretty good book…if I do say so myself). In addition, if you would like to visit the Taxes FAQ (Frequently Asked Questions) area, click on http://www.fool.com/school/taxes/taxes.htm and you'll be right at the home page. Pay special attention to the "archives" section. Check it out. Finally, if you need to get to the IRS web site, click on http://www.irs.ustreas.gov to go directly there.

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