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RayAme's Discussion of Taxes & Insurance for New Immigrant

RayAme's Discussion of Taxes & Insurance for New Immigrant

Old May 28th 2013, 2:51 pm
  #16  
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Default Re: RayAme's Immigrant Visa questions...(Moved to to the Marriage Based Visas forum)

No. Money you transfer is not taxed. You get taxed on income, be it earned income or unearned income. A capital gain is unearned income.

Regards, JEff

Originally Posted by RayAme
Am I right in thinking it is only the balance I transfer and not the whole amount that is taxed?
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Old May 28th 2013, 3:38 pm
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Default Re: RayAme's Immigrant Visa questions...(Moved to to the Marriage Based Visas forum)

Originally Posted by jeffreyhy
No. Money you transfer is not taxed. You get taxed on income, be it earned income or unearned income. A capital gain is unearned income. ....
No, a capital gain is a capital gain, covered by the tax rules and rates for capital gains, in nature it is typically a one-off or transactional matter. Referring to it as "income" will serve only to confuse.

Income is typically on-going, and as you pointed out may be earned (wages, salary, or trading profits), or unearned (from investments)
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Old May 28th 2013, 3:48 pm
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Default Re: RayAme's Immigrant Visa questions...(Moved to to the Marriage Based Visas forum)

A capital gain is a type of unearned income, from an investment. Typically a one-off if from a real estate transaction, but could well be recurring, and recurring regularly, if from other types of investments.

Regards, JEff

Originally Posted by Pulaski
No, a capital gain is a capital gain, covered by the tax rules and rates for capital gains, in nature it is typically a one-off or transactional matter. Referring to it as "income" will serve only to confuse.

Income is typically on-going, and as you pointed out may be earned (wages, salary, or trading profits), or unearned (from investments)
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Old May 28th 2013, 3:56 pm
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Default Re: RayAme's Immigrant Visa questions...(Moved to to the Marriage Based Visas forum)

This thread is a continuation of RayAme's thread in the Marriage-Based Forum here: http://britishexpats.com/forum/showthread.php?t=798080

That thread is for his visa questions. This thread is for his taxes and insurance questions.

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Old May 28th 2013, 4:05 pm
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Default Re: RayAme's Immigrant Visa questions...(Moved to to the Marriage Based Visas forum)

Originally Posted by jeffreyhy
A capital gain is a type of unearned income, from an investment. Typically a one-off if from a real estate transaction, but could well be recurring, and recurring regularly, if from other types of investments. ....
There is a whole separate section for capital gains in the tax codes of both the US and UK, and in neither country does it serve any useful purpose to call a capital gain "income".

Last edited by Pulaski; May 28th 2013 at 5:22 pm.
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Old May 28th 2013, 4:51 pm
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Default Re: RayAme's Immigrant Visa questions...(Moved to to the Marriage Based Visas forum)

I don't know about the UK, but how does one report their capital gains in the USA? Ah, there it is, in the Income section of Form 1040, along with wages, interest, dividends, pensions and annuities, etc.

Regards, JEff

Originally Posted by Pulaski
There is a whole separate section for capital gains in the tax codes of both the US and UK, and in neither country does it serve any useful purpose to call a capital gain "income".
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Old May 28th 2013, 5:24 pm
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Default Re: RayAme's Immigrant Visa questions...(Moved to to the Marriage Based Visas forum)

Originally Posted by jeffreyhy
I don't know about the UK, but how does one report their capital gains in the USA? Ah, there it is, in the Income section of Form 1040, along with wages, interest, dividends, pensions and annuities, etc.

Regards, JEff
I apologize, yes, the US does charge "income tax" on capital gains, however conceptually capital gains are quite distinct from income.
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Old May 28th 2013, 5:31 pm
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Default Re: RayAme's Immigrant Visa questions...(Moved to to the Marriage Based Visas forum)

Originally Posted by Pulaski
I apologize, yes, the US does charge "income tax" on capital gains, however conceptually capital gains are quite distinct from income.
Even if there isn't any tax due on capital gains such as when total income is low, the capital gains is reported on the tax return as taxable income. It is done that way because the AMT uses taxable income to determine if AMT applies even though there isn't any AMT on capital gains. Also it is used to determine what percentage of social security benefits are taxable. I believe health care reform also uses taxable income to determine the subsidy.

So in my opinion, capital gains is a form of unearned income that is charged at a different rate than other unearned income (other than qualified dividends).

Last edited by Michael; May 28th 2013 at 5:35 pm.
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Old May 28th 2013, 5:54 pm
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Default Re: RayAme's Immigrant Visa questions...(Moved to to the Marriage Based Visas forum)

Agreed. Capital gains may be taxed differently from other forms of income, but it is nevertheless a type of unearned income. When realized it puts money in your pocket that you didn't have before.

The tax code has all sorts of twists and turn in it, to promote various agendas.

Regards, JEff

Originally Posted by Michael
So in my opinion, capital gains is a form of unearned income that is charged at a different rate than other unearned income (other than qualified dividends).
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Old May 28th 2013, 6:25 pm
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Default Re: RayAme's Immigrant Visa questions...(Moved to to the Marriage Based Visas forum)

Originally Posted by jeffreyhy
The tax code has all sorts of twists and turn in it, to promote various agendas.
Last year I had a reasonable income which included social security, a small pension, qualified dividends, and capital gains but I paid very little tax. I looked at my taxable income and wondered why I was paying so little in taxes. I also wanted to determine the effect on taxes if I had more capital gains or distributed some IRA funds but it was so difficult to determine exactly how everything worked.

First I realized that all my capital gains and qualified dividends were taxed at 0% and then I realized that only about 15% of my social security benefits were taxable. What took me a long time to figure out was what would happen if I had more capital gains and determined that the additional gains would still be taxed at 0% but each dollar of additional capital gains or qualified dividends would add one additional dollar of social security benefits that would be taxed. As far as the distribution of IRA funds, that would be taxed and for every dollar distributed, one additional dollar of social security would also be taxed which would effectively double my marginal tax bracket.
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