From the perspective of the Internal Revenue Service, if you sell your foreign stock at a gain, you will have to pay tax in the same manner as if you had taken a profit on an American stock. If you hold your stock for less than a year before selling it, your profit will be taxed at the ordinary income tax rates.

Where do I report foreign stock sales?

Foreign stock or securities, if you hold them outside of a financial account, must be reported on Form 8938, provided the value of your specified foreign financial assets is greater than the reporting threshold that applies to you.

How are foreign capital gains and losses calculated?

1 Net capital loss from each rate group is netted against any net capital gain in the same rate group in the other foreign income categories. 2 U.S. capital losses are netted against U.S. 3 For each foreign rate group, leftover net capital losses after Step 1 are netted against remaining foreign net capital gains and U.S.

Do you pay income tax on foreign stock when sold?

If you hold your stock for less than a year before selling it, your profit will be taxed at ordinary income tax rates. Despite the taxation scheme described in Section 1, the foreign tax credit is generally available to you if your income is otherwise taxable under the laws of both the United States and a foreign nation.

Do you have to pay tax on capital gains in a foreign country?

Every country has its own tax laws, and they can vary dramatically from one government to the next. Many countries have no capital gains tax at all or waive it for foreign investors. But plenty do.

How do I report gain on sale of foreign shares?

Once you determine the amount of your gain on the sale, you will need to convert the gain from the foreign currency to US dollar (using a daily exchange rate at the time of both the purchase and the sale). Currently the maximum capital gains rate in the US is 20%.