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Capital Gains

You have a capital gain if you sell the asset for more than your basis. You have a capital loss if you sell the asset for less than your basis. Losses from the sale of personal–use property, such as your home or car, are not deductible.

Capital gains and losses are classified as long–term or short–term. If you hold the asset for more than one year before you dispose of it, your capital gain or loss is long term. If you hold it one year or less, your capital gain or loss is short term.

You may have to report capital gains and losses on Form 1040, Schedule D. If you have a net capital gain, that gain may be taxed at a lower tax rate. The term "net capital gain" means the amount by which your net long–term capital gain for the year is more than your net short–term capital loss. The highest tax rate on a net capital gain is generally 15% (or 5%, if it would otherwise be taxed at 15% or less). There are 3 exceptions:

The taxable part of a gain from qualified small business stock is taxed at a maximum 28% rate.
Net capital gain from selling collectibles such as coins or art is taxed at a maximum 28% rate.
The part of any net capital gain from selling Section 1250 real property that is due to recapture of straight-line depreciation is taxed at a maximum 25% rate.

If you have a taxable capital gain, you may be required to make estimated tax payments.

If your capital losses exceed your capital gains, the amount of the excess loss that can be claimed is limited to $3,000, or $1,500 if you are married filing separately. If your net capital loss is more than this limit, you can carry the loss forward to later years.

The Taxation of Capital Gains of Nonresident Alien Students, and Scholars.

Under the residency rules, most foreign students, foreign scholars, and alien employees of foreign governments and of international organizations in the United States are considered to be "exempt individuals". That is, they are exempt for extended periods of time from counting days of presence in the United States for the purposes of determining their residency in the United States. Thus, most foreign students, foreign scholars, and the alien employees of foreign governments and of international organizations in the United States remain nonresident aliens in the United States for extended periods of time. Many of these nonresident aliens make personal investments in the United States which generate income from capital gains.

I.R.C.§871(a)(2) imposes a flat tax of 30% on U.S. source capital gains in the hands of nonresident alien individuals physically present in the United States for 183 days or more during the taxable year. The 183-day rule of I.R.C.§871(a)(2) bears no relation to the 183-day rule of the substantial presence test of I.R.C.§7701(b)(3) and the exceptions to the residency rules, e.g., exempt individual/days not counted, of that section. Thus, there are situations in which the 183-day rule of I.R.C.§871(a)(2) may apply to individuals who have not crossed the threshold of U.S. residence under of I.R.C.§7701(b)(3). For example, a foreign diplomat, consular officer, or other nonresident alien employee of a foreign government, or nonresident alien employee of an international organization who is visiting the United States in A or G nonimmigrant status for a period longer than 183 days in a calendar year would be subject to the 30% tax imposed by I.R.C.§ 871(a)(2) on his U.S. source capital gains. The same rule applies to a foreign student or scholar visiting the United States in F, J, M, or Q nonimmigrant status whose presence in the United States exceeds 183 days in any calendar year.