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Old 27-05-2020, 12:52 AM   #2311
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It's possible. It's still your account, I presume.


Yes, 30% of the proceeds will probably be withheld in that event, recoverable via IRS Form 1040NR.

The basic issue here is that the broker has a lot more to lose than you do if the broker fails to withhold but should have withheld per IRS rules. Thus the broker has an incentive to withhold if the broker has any doubts about the rules. That's as it should be, really. This is all "working as designed."


Not expensive as such, but a little troublesome. I think you can recover these funds (without interest), but it won't be until early 2021.


Yes, please keep us posted.
The support team called and told me that the wealth management team said that the merger is taxed at 30%. Upon further questioning, the support keep repeating the same thing and say what the brokerage did is correct. He did not provide any solutions and told me to talk to my own tax advisor on this.

So I requested to talk to someone who is from wealth management team or someone more knowledgeable, but I was turned down repeatedly. The support is useless.

By the way, do you know how much does a tax advisor consultation cost? Apparently the W-7 form required supporting document to be certify true-copied on my passport by Certifying Acceptance Agent (CCA). I wonder is it still worth it spending money to get back my money.
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Old 27-05-2020, 09:29 AM   #2312
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I read about those target funds, what I don't understand is: if you have access to such funds, why bother to invest diy in other ETF and whatnot? Why don't put all your money in one or few of those target funds?
What's the advantage?
Yes, theyíre fabulous. I merely tweak them a bit around the edges, primarily for tax optimization reasons.

By the way, do you know how much does a tax advisor consultation cost?
Something like US$250 and up for a competent one, but you may not need one. If you simply want a tax preparer to do it all for you, itíll probably cost about US$425. (I think thatís what Greenback and H&R Block charge for a full/basic 1040NR form preparation, as examples.)

Apparently the W-7 form required supporting document to be certify true-copied on my passport by Certifying Acceptance Agent (CCA). I wonder is it still worth it spending money to get back my money.
No, thatís not correct. A CCA is one path to get an ITIN, but you can still get one via postal mail. And one envelope will do it, together with your 1040NR. You just need the true copy certification from the government that issued your passport, thatís all. If itís a Singaporean passport then I believe youíd just make a clean color photocopy of your unexpired (and not soon to expire) passportís data page (not enlarged), bring the photocopy and your original passport to the Consular Services counter at the Ministry of Foreign Affairs, pay S$10 (not cash, not Visa/Mastercard; NETS works), and then they should be able to stamp the copy for you. Thatís when the MFA reopens after the Circuit Breaker, of course. This is called ďlegalisation,Ē and it should be fine for the IRS. Contact the MFA ahead of time to make sure they can do this, but Iím pretty sure thatís exactly how you do it.

One way to prepare a 1040NR is via the online tax preparation Web sites, e.g. TaxAct. If you do this in February and use a coupon for the site (easy to find) itíll probably cost US$20 or less. (Iíve seen as low as US$8 in the past.) Usually these sites let you pay at the very end only if youíre happy. You wonít be able to e-file, but you can still print out and sign the tax forms, then mail them in. Or you can do it for zero using the PDFs and instructions, maybe also IRS Free File Fillable Forms.

Before you chase this stuff down please double check that you have a high probability of getting your money back. But at 30% of even 100 shares (roughly US$3,000 to recover), if you genuinely donít owe this tax, thisíll be well worth doing.
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Old 27-05-2020, 09:54 PM   #2313
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Let's assume for sake of argument the broker made a mistake and withheld too much. I don't think so, but let's assume that. To my knowledge the IRS doesn't allow the broker to reverse this error. You have to resolve all such errors with the IRS directly, as far as I know. I suppose you could negotiate for free trades or something like that as "good will" compensation if you find some good evidence the broker screwed up.
I confirm that. My broker screwed up once and withheld 28% of the total transaction amount when I sold some shares. Later on they found out that I had W8Ben on file so there shouldn't be any withholding at all. But just as you said, they can not reverse it. I had to wait till tax season to claim it back.

Fortunately, it was 2015 and my original plan was to buy some commodity index, just before the oil price plunged... So in the end it actually played out well.
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Old 27-05-2020, 10:03 PM   #2314
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Something like US$250 and up for a competent one, but you may not need one. If you simply want a tax preparer to do it all for you, it’ll probably cost about US$425. (I think that’s what Greenback and H&R Block charge for a full/basic 1040NR form preparation, as examples.)


No, that’s not correct. A CCA is one path to get an ITIN, but you can still get one via postal mail. And one envelope will do it, together with your 1040NR. You just need the true copy certification from the government that issued your passport, that’s all. If it’s a Singaporean passport then I believe you’d just make a clean color photocopy of your unexpired (and not soon to expire) passport’s data page (not enlarged), bring the photocopy and your original passport to the Consular Services counter at the Ministry of Foreign Affairs, pay S$10 (not cash, not Visa/Mastercard; NETS works), and then they should be able to stamp the copy for you. That’s when the MFA reopens after the Circuit Breaker, of course. This is called “legalisation,” and it should be fine for the IRS. Contact the MFA ahead of time to make sure they can do this, but I’m pretty sure that’s exactly how you do it.

One way to prepare a 1040NR is via the online tax preparation Web sites, e.g. TaxAct. If you do this in February and use a coupon for the site (easy to find) it’ll probably cost US$20 or less. (I’ve seen as low as US$8 in the past.) Usually these sites let you pay at the very end only if you’re happy. You won’t be able to e-file, but you can still print out and sign the tax forms, then mail them in. Or you can do it for zero using the PDFs and instructions, maybe also IRS Free File Fillable Forms.

Before you chase this stuff down please double check that you have a high probability of getting your money back. But at 30% of even 100 shares (roughly US$3,000 to recover), if you genuinely don’t owe this tax, this’ll be well worth doing.
I spoke with someone from Tax And Accounting Hub. This is what he replied me..

Please note you will receive a Form 1042S or Form 1099 next year for tax withholding. Once you receive we should be able to withhold a 100% refund or partial refund based on codes.
You also have an option to submit ITIN application along with Form1040NR to claim refund all in one go next year.


I am intending to ask them these questions that are on my mind:
1) Who will send me the Form 1042S or 1099? my brokerage firm? I think this 1042S form is for declaring your income, and will receive it in January. In addition, I never receive such form before, even for my typical dividends. Hence I have doubts if i will receive the form next year.

2) If code is 37, i am able to get back my 100% refund? According to him, there will be a code on the 1042S form and from there I will know if i am able to claim the refund back. I went to check up on the income code on website (sorry i am unable to post link)
Use code 37 (return of capital) for a nondividend distribution. This is a distribution that is not paid out of the earnings and profits of a corporation. It represents a distribution in part or full payment in exchange for stock.

I suppose that my situation will fall under code 37 theoretically? However i am also unsure who submit this 1042S form and what code will they use.

Last edited by Kenghead; 27-05-2020 at 10:12 PM..
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Old 27-05-2020, 10:08 PM   #2315
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I confirm that. My broker screwed up once and withheld 28% of the total transaction amount when I sold some shares. Later on they found out that I had W8Ben on file so there shouldn't be any withholding at all. But just as you said, they can not reverse it. I had to wait till tax season to claim it back.

Fortunately, it was 2015 and my original plan was to buy some commodity index, just before the oil price plunged... So in the end it actually played out well.
Hi Bfish, so you did the tax refund all by yourself, like what BBCWatcher mentioned, File W-7 to get ITIN and then 1040-NR next year? Or the broker advise and assist you?
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Old 28-05-2020, 05:41 AM   #2316
 
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You just need the true copy certification from the government that issued your passport, thatís all. If itís a Singaporean passport then I believe youíd just make a clean color photocopy of your unexpired (and not soon to expire) passportís data page (not enlarged), bring the photocopy and your original passport to the Consular Services counter at the Ministry of Foreign Affairs, pay S$10 (not cash, not Visa/Mastercard; NETS works), and then they should be able to stamp the copy for you. Thatís when the MFA reopens after the Circuit Breaker, of course. This is called ďlegalisation,Ē and it should be fine for the IRS. Contact the MFA ahead of time to make sure they can do this, but Iím pretty sure thatís exactly how you do it.
I can confirm that this is the right way to legalise a passport, and it's accepted by the IRS.
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Old 28-05-2020, 08:59 AM   #2317
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1) Who will send me the Form 1042S or 1099? my brokerage firm? I think this 1042S form is for declaring your income, and will receive it in January.
Yes. Ask your broker to generate one. This part might be tricky, but see below.

2) If code is 37, i am able to get back my 100% refund? According to him, there will be a code on the 1042S form and from there I will know if i am able to claim the refund back. I went to check up on the income code on website (sorry i am unable to post link)
Use code 37 (return of capital) for a nondividend distribution. This is a distribution that is not paid out of the earnings and profits of a corporation. It represents a distribution in part or full payment in exchange for stock.

I suppose that my situation will fall under code 37 theoretically? However i am also unsure who submit this 1042S form and what code will they use.
Yes, that's the idea. Some brokers screw this up, too, but hopefully not.

The IRS can actually assess penalties on the broker for failure to supply you (and others) with accurate IRS Form 1042-S reports. I don't think the IRS draws any distinction between U.S. and non-U.S. brokers, and hypothetically if it escalates enough the U.S. could cut a broker or other financial institution off from U.S. markets. Anyway, that's not the first argument you should make with your broker, but if you get to the point where your broker is uncooperative you can point their compliance department in this direction -- "to be helpful and courteous," of course. And then if necessary you can write a letter to the IRS documenting your broker's lack of cooperation and copy your broker's compliance department.

....Anticipating a possible counterargument, and with some more checking, Standard Chartered Singapore might try to argue it's not subject to U.S. law in this matter. No, not correct. First of all, Standard Chartered Singapore already acknowledged coverage under U.S. law in its own actions: they withheld tax and paid the IRS. (They'd be in huge trouble if they didn't do that, or could be anyway.) Second, the IRS's instructions for Form 1042-S don't allow that argument. They're a "withholding agent" under U.S. tax law, and it explicitly doesn't matter that they're either foreign or corporate. In short, Standard Chartered Singapore is legally required to issue you IRS Form 1042-S, and it must be accurate, under penalty of U.S. fines and penalties which in some cases are effectively unlimited.

Anyway, hopefully you don't have to get anywhere near these stages, but those are the facts as best I can determine them. Sometimes we "ordinary investors" are correct as a matter of law even when major financial institutions are not.

FYI, if you pay someone to prepare your 1040NR, the tax preparer may offer to advance you the refund. Usually that's a bad idea, because the effective interest rate on a tax refund advance is ordinarily quite steep. I also don't think it's a good idea for tax preparer to be "in the loop" on a refund since there's an obvious conflict of interest. Yes, tax preparers often advertise "We'll help you get the biggest refund!" but what you really want a tax preparer to do is to get your tax return correct. That's because it's ultimately your ass on the line with the tax agency.
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Last edited by BBCWatcher; 28-05-2020 at 09:03 AM..
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Old 28-05-2020, 12:22 PM   #2318
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I can confirm that this is the right way to legalise a passport, and it's accepted by the IRS.
Hi CrashWire, thank you for confirming

In short, Standard Chartered Singapore is legally required to issue you IRS Form 1042-S, and it must be accurate, under penalty of U.S. fines and penalties which in some cases are effectively unlimited.

Anyway, hopefully you don't have to get anywhere near these stages, but those are the facts as best I can determine them. Sometimes we "ordinary investors" are correct as a matter of law even when major financial institutions are not.

FYI, if you pay someone to prepare your 1040NR, the tax preparer may offer to advance you the refund. Usually that's a bad idea, because the effective interest rate on a tax refund advance is ordinarily quite steep. I also don't think it's a good idea for tax preparer to be "in the loop" on a refund since there's an obvious conflict of interest. Yes, tax preparers often advertise "We'll help you get the biggest refund!" but what you really want a tax preparer to do is to get your tax return correct. That's because it's ultimately your ass on the line with the tax agency.
If SCB issued me IRS Form 1042-S next year, and the code they use is different/wrong, resulting in me unable to file a tax return for it. Is there anything i can do? because it seems to me that the submission has already been cast in stone.

On the advice with tax preparer, what do you mean by "I also don't think it's a good idea for tax preparer to be "in the loop" on a refund since there's an obvious conflict of interest."
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Old 28-05-2020, 05:38 PM   #2319
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If SCB issued me IRS Form 1042-S next year, and the code they use is different/wrong, resulting in me unable to file a tax return for it. Is there anything i can do? because it seems to me that the submission has already been cast in stone.
I just explained that the financial institution is legally required to prepare a correct filing. They have a financial and compliance incentive to be correct. If they're not correct, just ask them to correct it, and (if necessary) point out what the law requires.
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Old 28-05-2020, 10:15 PM   #2320
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I just explained that the financial institution is legally required to prepare a correct filing. They have a financial and compliance incentive to be correct. If they're not correct, just ask them to correct it, and (if necessary) point out what the law requires.
Hi BBCWatcher, thank you for your patience on explaining the stuff to me.
I wonder if they go correct the form, does that means it will take another year for them submit again or will it be done within the same year?
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Old 29-05-2020, 12:21 AM   #2321
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I wonder if they go correct the form, does that means it will take another year for them submit again or will it be done within the same year?
Kenghead, I'm starting to get a little impatient because I provided a link to the specific part of the IRS's published rules that explains all this. The IRS can levy fines if the withholding agent fails to provide you with Form 1042-S by August 15.

....Now will you stop worrying, please? There's nothing else you can do at this point except wait until the 2020 edition of IRS Form 1040NR is ready (and the 2020 edition of IRS Form W-7). That's at least 8 months from now. Standard Chartered has a legal obligation to provide you the necessary report for next year's filing. What else can be said? If you don't get the form, or if it isn't correct, you deal with it then as best you can. That's all you can do, and there's no use fretting about it now.
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Old 29-05-2020, 01:26 AM   #2322
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Hi BBCwatcher, i apologise for causing displeasure. You are really knowledgeable and helpful, I appreciate for all the advice that you have given. Thank you again for being patient with me
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Old 29-05-2020, 10:04 AM   #2323
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ďPoachingĒ Hong Kongís Talent?

Thereís an interesting, provocative idea in this article: how about offering most Hong Kongers a special visa and a path to permanent residence? His specific idea is a ďplace-based visa,Ē meaning the immigrant would have to keep his/her home within a particular community for at least 5 years but then could apply for an unrestricted U.S. green card. The U.S. has gobs of empty and underutilized housing stock in broad areas of the country. His idea doesnít have to be limited to the U.S., though.
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Old 31-05-2020, 01:40 AM   #2324
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There’s an interesting, provocative idea in this article: how about offering most Hong Kongers a special visa and a path to permanent residence? His specific idea is a “place-based visa,” meaning the immigrant would have to keep his/her home within a particular community for at least 5 years but then could apply for an unrestricted U.S. green card. The U.S. has gobs of empty and underutilized housing stock in broad areas of the country. His idea doesn’t have to be limited to the U.S., though.
during the handover of hk to china, the gov had some special schemes for them, it was much^3 easier and quicker for them to gain pr than any other nationalities but few ppl took it up and significant number gave up later and headed back or elsewhere; some famous personalities was said to be reluctant to settle as their children will need to sacrifice 2 yrs to conscription

singapore is unlikely to be attractive to them

the thing which makes us wonder what would have happened if we had tried to poach talent after the collapse of the soviet union
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Old 31-05-2020, 01:53 AM   #2325
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any idea how does the concept of residential ppty investment work for those with lots of spare cash?

if the developer is certain that property values will appreciate adequately and selling prices do not reflect this outlook, wouldn't they just hold on to and rent out the ppty they have developed to benefit from rising ppty values in future?

Otherwise it just shows that ppty price appreciation and rental yield have been factored into the current selling price? what benefits are there for retail investors who buy not to live in them but to rent them out and wait for ppty values to rise?
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