STOCKS AND SHARES
#1
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STOCKS AND SHARES
I am a US tax preparer. My client had two stocks in his ISA and he sold them while a resident in the USA in 2021. Are these considered Stock and Shares ISA Investment? He became a US resident alien in 2021. Was this considered a PFIC? It doesn't seem as they are as these two companies have going businesses and not passive investments.
Do I include as capital gains or losses when I report them on a 1040?
Do I include as capital gains or losses when I report them on a 1040?
#2
Re: STOCKS AND SHARES
If they are shares listed on a recognized stock exchange and not some form of mutual fund (in the UK generally a Unit Trust, OEIC or Investment Trust) then they are not PFICs. The IRS does not recognize ISAs so all income and gains within the ISA are taxable. From what you have said they would be treated as normal capital gains. However I am not a professional tax advisor, and you are. You should not be making decisions on behalf of your client based upon an internet forum.
#3
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Re: STOCKS AND SHARES
You can hold individual stocks within an ISA so if they are not funds then the gain or lost is calculated based on the $ value the day they were bought and sold. XE.com holds historic exchange rates which is what I use to convert £s to $s on a particular date.
I am not a tax professional, just passing on what I understand to be the case.
I am not a tax professional, just passing on what I understand to be the case.