Discussion:Non Resident Alien Follies

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Discussion Forum Index --> Tax Questions --> Non Resident Alien Follies

PostingFromWork (talk|edits) said:

26 March 2008
I've got a complicated situation for and I'd appreciate it if you fine folks could give this a second look.

The taxpayer is a French citizen and is married to a US citizen. Taxpayer was in the US on a H1B visa in 2005. In December of 2005, they moved to the United Kingdom, where they became residents and remained until 2008. In 2006, taxpayer spent 7 days for work and 7 days for vaction in the US. Spouse only spent 7 days for vaction in the US. I haven't cracked the 2007 income yet.


Income for 2006: Taxpayer was on the US payroll of her employer for the first month of 2006. PA and Philadelphia tax was withheld. Taxpayer also had dividends and proceeds from sales of US company stock from personal investments.

Spouse's only income was from an early distribution of a retirement plan, no exception known at this time.


I'm thinking that the correct treatment would be to file the spouse as MFS on a 1040, and to report taxpayer's w-2 wage, dividend, and capital gain income on a 1040-NR as an "other married non-resident alien." The taxpayer has significant non-US wages, so I don't want to make a 6013(g) election. I haven't yet looked at the PA situation.


Per the US-UK tax treaty Article 13 §5, the capital gains would not be taxable to the US and the dividends would be limited to tax of 15% per Article 10 §2, right?

Dhtax (talk|edits) said:

26 March 2008
Not sure I followed all of that but your solution sounds right and I too would not want to make the election. Check whether any of TPs US income is taxable in UK. Check US/UK treaty on the spouse's early distribution too -- probably only taxable in the US (ie may not have to report it in UK and take tax credit). Maybe Lizzit will chime in -- she's the UK expert.

David H.

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