On Nov 16, 2:26 pm, jma...[at]andrewmitchel.com wrote:

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Yes, bank interest is taxed at 0%. Is all interest bank or portfolio
interest? Is there any other type of interest?

If the person in the original post were to open an account at one of
the online brokerages, they would likely receive interest on any cash
in their account. Would this interest be bank/portfolio interest?
For a US citizen, the interest on the brokerage account is reported on
the person's 1099-INT, so I'm guessing it is bank interest, and
therefore subject to 0% tax. The other kind of interest I've seen is
muni bond interest (you can invest the cash in your brokerage is a
muni fund which saves US citizens from paying federal and state tax,
maybe a good idea for people in high tax brackets). However, is this
interest tax-free to the foreign account holder as well? I would
imagine so.

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On Nov 16, 2:00*pm, "removeps-gro...[at]yahoo.com" <removeps-
gro...[at]yahoo.com> wrote:
- quote -

I am not sure what you are reading, but you should read Code § 871(a)
for the general rule that U.S. source interest income paid to non-U.S.
persons is subject to a 30% tax. There are exceptions in Code 871(h)
and (i) for bank interest and portfolio interest, among others.

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On Nov 15, 6:35 pm, jma...[at]andrewmitchel.com wrote:
- quote -

What about dividends?

All dividends would be 30%, and there is no special qualified
dividends rate for non citizens.



- quote -

Why would it be 0% of 30%. From my reading, it should be 0% unless he
spent over 183 days here.


- quote -

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Nov 14, 10:34*pm, "W" <persistent...[at]spamarrest.com> wrote:
- quote -

The interest income would either be zero withholding or 30%
withholding. There is no income tax treaty with Peru to reduce the
withholding. If the partnerships are engaged in a U.S. trade or
business, the partnership will be required to withhold taxes at the
highest federal rate (35%), and your relative would need to file a
U.S. federal tax return to report this partnership income. A state
income tax return may also be required. Capital gains would not be
subject to U.S. tax as long as your relative does not spend more than
183 days in the U.S. during the year.

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

I have a relative who is a foreign citizen who wants to open a brokerage
account in the US for investment. He would receive in this account
multiple forms of income:

- interest income
- Schedule K-1 (from Master Limited Partnerships)
- capital gains (from stock sales held for at least one year)

Under the tax treaty with Peru, what amounts should be automatically
withheld in this account by the broker?

Would a non resident need to file a US tax return for such income? What
amount of US taxation would each of the three types of income I am
identifying above receive?

--
Will

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >