K-1 for non resident alien (Trader living in europe)

Discussion in 'Taxes and Accounting' started by nclsamy, Apr 11, 2016.

  1. nclsamy

    nclsamy

    Hello, guys,

    First of all, let me thank you for letting me be a part of this forum. I am an absolute begginer in stock trading and I could really use some help!

    As the title says, I am living in Europe and I've filled a W-8BEN form so I don't pay taxes in America, except for the 10% withheld tax on dividends. Capital gain taxes are paid in my homecountry.

    Last year I day-traded the $UCO (ProShares Ultra DJ-UBS Crude Oil) for almost break even (an <$10 loss). Last week I received my K-1 associated with this ETFs.

    I never knew those ProShares ETFs issue K-1s, otherwise I would never trade them (I like to keep it simple as I am currently learning the process).

    What should I do with it?

    Appreciate any advice a lot!
     
  2. coolraz

    coolraz

    You are not a US Citizen nor a resident of the US. There are many non-us investors that invest in the US (real estate, stock etc). Receiving a K-1 does not in of itself mean you have to a file a tax return. You normally file a tax return only if you have something called Effectively Connected Income which is from a "trade or business" in the US. typically trading stocks does not require this. Easiest thing is to ask a US CPA for details
     
  3. nclsamy

    nclsamy

    Many thanks for the reply, coolraz! I will try and seek advice from an US CPA. Unfortunately I don't know anyone directly, so I will have to do a google search and try to contact them. All the best wishes!
     
  4. http://greentradertax.com/trader-tax-center/international-tax-matters/

    Foreign partners in a U.S. trading partnership can be tax free
    If the non-resident is a member of a U.S.-based “pass through” taxable entity — such as a hedge fund or proprietary trading firm — that person is still exempt from effectively connected income. Typically, foreign partners in U.S. partnerships are considered to have U.S. ECI on their Schedule K-1 income. But if the partnership is a trading company — in financial markets, not goods — the income is considered portfolio income, including the partner’s share