Porked & busted: Thai woman nabbed for telling ‘pork’ pies 208 times

[senoremac]

Has anyone cashed in stock while residing here via a 2555ez form?

I'm an alien resident who works and pays taxes in Thailand. So far I've been exempt from taxes to the IRS, but this year I will have a realized gain of 10k. My annual Thai salary of 25k plus 10k from capital gains is well within the exempt range according to the IRS. gov website, but being the IRS, I'm worried that I'm missing some of the fine print.

Helpful responses will be much appreciated

[Time Traveller]

Yes you are. It's only earned income that has a tax exempt limit of approx$90k. Capital gains are considered unearned income, which you must pay tax on as these does not come under the exemption.

[Lefty]

I suspect that with your standard deduction and exemption you won't be paying any tax on your $10,000 gain. Try filing with Turbo Tax online.really easy to use, cost around $40.

Lefty

[maxman71]

Time Traveller has it about right...earned income (i.e. salaries, wages) is subject to the "expat exemption" of about USD 93,000 per year (I think this ceiling goes up to about $96,000 next year). HOWEVER, while you are exempt from Fed income taxes, the expat exemption does not exempt you from FICA (i.e. Social Security/Medicare taxes) on earned income. But whatever income taxes you pay in Thailand will offset the amount owed to the US, including against earned income taxes owed in the US. Unearned income or "passive income" such as capital gains, rents, royalties, dividends, income from Trusts, etc. are not subject to the expat exemption.

Also, you need to pass at least one of the tests that allow you to take advantage of the expat exemption. One of the most common tests used is the # of days you lived outside the US; threshold is at least 330 calendar days during the year outside the US. There are others you can use too.

[senoremac]

Thanks guys, I really appreciate you taking the time to inform me about this thread.

[kyb789]

I suspect that with your standard deduction and exemption you won't be paying any tax on your $10,000 gain. Try filing with Turbo Tax online.really easy to use, cost around $40.

Lefty

Use Turbo Tax if you are not familiar with the tax forms and need lots of user assistance. Once you get into the routine of using the same forms every year, I recommend TaxAct. Its less than $10 and does a great job. If you have state income (such as rental property) then add another ~$10. Less user friendly but great value.