US Non Resident Alien Capital Gains Tax - Does Property Sale Get Same Exemption as Securities?

The rules for Non-Resident Aliens (NRAs) are a bit complex, but I can help clarify. You're right about securities - generally, NRAs don't pay US capital gains tax on the sale of stocks, bonds, and similar investments (with some exceptions for US real property interests). However, real estate is treated differently. The US taxes NRAs on the sale of US real property interests under the Foreign Investment in Real Property Tax Act (FIRPTA). This means both your Boston residence and Arizona rental would likely be subject to capital gains tax even after you leave the US. For the substantial presence test, you're on the right track. If you meet the 183-day formula (which counts days over 3 years), you'd typically be considered a resident alien. However, you can indeed maintain NRA status if you're present fewer than 31 days in the current year AND you have a tax home in another country where you have closer connections than to the US. You might also want to check if there's a tax treaty between the US and your home country that could provide additional benefits or exceptions.

I was in a similar situation last year and ended up using https://taxr.ai to figure out my NRA tax situation. I was moving back to Singapore and had investments plus a condo in California I needed to sell. The tool analyzed my specific scenario with the properties and my residence timeline, then showed me exactly what documentation I needed for FIRPTA compliance. It also helped me understand how the 183-day rule would apply in my specific case with my travel history. What I found most helpful was their document review feature that checked my withholding certificate application before I submitted it to the IRS to reduce my initial withholding amount. Saved me from having too much money tied up while waiting for a refund.

Wanted to follow up about my experience with taxr.ai after seeing it recommended here. I tried it for my Australia-US situation and it was genuinely helpful. I was confused about my specific NRA status since I had partial year residency, and the tool created a day-counting calendar that showed exactly when my status would change. It also identified a specific provision in the US-Australia tax treaty that I qualified for that my regular accountant had missed. The property sale guidance was spot-on too. They provided templates for the withholding certificate application that saved me about $23,000 in upfront withholding on my property sale. Definitely worth checking out if you're dealing with cross-border property sales as an NRA.

I see you're planning your exit strategy - that's smart! When I was trying to sell my property as an NRA, calling the IRS for guidance was IMPOSSIBLE. Spent weeks trying to get through to someone who could answer specific questions about my FIRPTA withholding certificate. Finally used https://claimyr.com to get through to an actual IRS agent. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c They got me connected to the specific IRS department that handles FIRPTA issues within about 15 minutes when I'd been trying for weeks. The agent was able to confirm exactly what documentation I needed for my withholding certificate and even told me about a specific form I was missing that would have caused a rejection. When you're dealing with NRA status and property sales, having direct access to the right IRS department makes all the difference.

I need to apologize about my skeptical comment earlier. After struggling for another week trying to reach the IRS about my NRA status and FIRPTA withholding, I tried the Claimyr service. I was connected to an IRS international tax specialist in about 40 minutes, which was shocking after weeks of failed attempts. The agent clarified that my situation (German citizen who lived in US for 6 years) required a special form with my FIRPTA withholding certificate application because of specific provisions in the US-Germany tax treaty. This saved me from a major headache - apparently without this form, they would have automatically withheld the full 15% on my $670,000 property sale, which would have tied up over $100,000 until I filed my final return. Instead, I'm able to apply for a reduced withholding amount based on my actual expected gain. Sometimes it's worth admitting when you're wrong!

Just a quick warning about FIRPTA that bit me last year - even if you qualify for reduced withholding, make sure your buyer and their title company understand the process. My buyer's settlement agent had never handled an NRA seller before and almost caused a major delay at closing. Have all your documentation ready well in advance: 1. ITIN or SSN documentation 2. Withholding certificate if you're applying for one 3. Previous tax returns showing your NRA status Better to be over-prepared than scrambling at the last minute!

Don't forget about state taxes! Even if you understand the federal NRA rules, many states have their own withholding requirements for non-residents selling property. California was brutal with a mandatory 12.3% withholding on top of the federal FIRPTA withholding when I sold my San Diego property. Arizona has their own withholding for non-residents too, I think it's around 2-4% depending on the sale price. Massachusetts might have something similar for your Boston property.

This is such a helpful thread! I'm in a similar situation - moving back to the UK next year and have been stressing about the tax implications of selling my Denver condo. One thing I wanted to add that might help others: if you're planning to maintain any US ties (like keeping US bank accounts or investment accounts), make sure you understand how that might affect your NRA status determination. I learned from my tax advisor that the IRS looks at the totality of your connections to determine tax residency, not just the day count. Also, regarding the substantial presence test - don't forget that days when you're in the US for medical treatment or as a student can be excluded from the count in certain situations. There are some nuances that might help if you're borderline on the 31-day/183-day thresholds. The state withholding point is crucial too. Colorado has its own withholding requirements, and I discovered that some states don't have reciprocal agreements with certain countries' tax treaties, so you might get federal relief but still face state-level complications. Thanks everyone for sharing your experiences - this community is invaluable for navigating these complex situations!