Hi all,
I'm a Spanish citizen and resident (and a Spanish boglehead by the way). Many years ago I was US resident (working in the US) for a couple years and when I returned to Spain I decided to leave my US bank account open with what remained of my earnings while working in the US, just in case I come back in the future. Since it was money I didn't need and I won't probably need for a long time (have my own savings and investments in Spain) I bought the Vanguard Total Stock Market Index Fund ETF (VTI) with my US savings.
Recently I sold a few VTI shares and a TEFRA withholding of 24% was applied to the total amount of my sale instead of my capital gains. I contacted my US broker who said my W-8ben had expired, so I filled a new one, and he said that withholding will be reduced to 15% but still will apply to total sale. When inquired he literally said: "The W8 TEFRA withholding is on dividends, interests and proceeds." I understand the withholding on dividends and interest, but I fail to understand why withholding is applied to total proceeds and not to capital gain.
So basically IRS is withholding not only the profit I made but also my original money![:annoyed]( "annoyed")
. I'm wondering if this is right or a mistake has been made. And if right, is there a way to recover back at least the withholding applied to my original purchase?
Thanks.
I'm a Spanish citizen and resident (and a Spanish boglehead by the way). Many years ago I was US resident (working in the US) for a couple years and when I returned to Spain I decided to leave my US bank account open with what remained of my earnings while working in the US, just in case I come back in the future. Since it was money I didn't need and I won't probably need for a long time (have my own savings and investments in Spain) I bought the Vanguard Total Stock Market Index Fund ETF (VTI) with my US savings.
Recently I sold a few VTI shares and a TEFRA withholding of 24% was applied to the total amount of my sale instead of my capital gains. I contacted my US broker who said my W-8ben had expired, so I filled a new one, and he said that withholding will be reduced to 15% but still will apply to total sale. When inquired he literally said: "The W8 TEFRA withholding is on dividends, interests and proceeds." I understand the withholding on dividends and interest, but I fail to understand why withholding is applied to total proceeds and not to capital gain.
So basically IRS is withholding not only the profit I made but also my original money
. I'm wondering if this is right or a mistake has been made. And if right, is there a way to recover back at least the withholding applied to my original purchase?Thanks.
Statistics: Posted by delluria — Tue Dec 31, 2024 12:24 pm — Replies 0 — Views 18