How to file bitcoin income to the IRS as a nonresident alien

Question

I am a Chinese student in US right now, and my taxation status is Nonresident Alien.

Since IRS has announced bitcoin as "property", I just wonder how to define my gains from my sell of bitcoin in US. My husband bought bitcoin on Chinese website by RMB and I sold them on coinbase to get USD.

According to IRS's explanation, is the money I gained from coinbase "US source property gains"? If so, how to calculate the gains? Does IRS accept transaction records from Chinese websites? Some of the websites even went bankrupt already.

It's my first time to file my taxes in US, I really don't want to cause any trouble. Thanks!

Answer 1

The analysis is the same as for other property.

You only need to report income that is effectively connected to the US or that is fixed, determinable, annual, or periodic (FDAP). So while you would need to report a US-sourced scholarship grant or wages from working in the US, you do not need to report a foreign transaction.

If the transaction was a foreign person abroad (your husband) buying and then selling from foreign people, and the property was not located in the US (this is mostly about real estate), then you should be quite safe not reporting it. The fact that he sold it for USD does not make it reportable or taxable in the US.

Please review Publication 54 if you have further questions.