Anonymous asked in Business & FinanceInvesting · 3 weeks ago

If I see a "foreign" (non-US) stock or fund, do I pay taxes in both countries?

And does it matter if the foreign stock/fund is in an IRA (trad. and/or ROTH) or not? Thannks for the help.


see = SELL (typo)

1 Answer

  • 3 weeks ago

    If you buy a foreign share or fund, check that it can be held as an ADR.  If you buy local (non ADR) shares you will pay two sets of commission (local broker and your US broker) plus custody fees.  Either way your dividends will be subject to local withholding which is nominally 30% but most countries have a tax treaty that brings this down to 15%. 

    You will not pay foreign capital gains when you sell. 

    You can credit your foreign dividend withholding against US tax that you owe when you file your tax return.  You will not be able to claim if this is in a retirement account as there is nothing to claim against.

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