Tax withheld - foreigner - stock sale



Can anyone help:

I am a foreigner and recently I have sold IBM stocks (bought
when I worked in the company) thorugh Equiserve.

My broker did not advised to fill in the W8 form and
consequently 30% of the proceedings are now held as taxation
(tax withheld) in the US.

Does anyone knows how to get this tax refund from IRS?! What
do I need to do / fill?!

Ps.: The stocks were sold in Dec 2003.



Al Bundy

A.G. Kalman said:
rgassaf wrote:
You say you purchased these shares while an employee of IBM.
I will assume that you purchased these shares through the
IBM Employee Stock Purchase Program (ESPP). The first thing
you need to do is to determine whether you had a qualified
disposition or a disqualified disposition (you failed to
hold the shares for the required periods to make them
qualified). Either way, some part of the sale is treated as
ordinary income and the balance is treated as capital
gain/loss. You report all this on Form 1040NR and Schedule
D. The ordinary part of the gain is placed on Line 8 as
compensation. The sale itself and any gain or loss goes on
the Schedule D. If you overpaid tax, the 1040NR acts as your
request for a refund.

To get an understanding of ESPP purchases and sales and
how you compute ordinary gain, see the following link.
THAT is an excellent article Alan. Truly explains it. Seeing
as no one here has jumped all over it, I can assume it's
even accurate! :)

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