I am charged 10% withholding for any sale of some stocks.

[trend2009]

I am trading a foreign entity account. This morning, I found that for some stocks, whenever I sell, I will be charged 10% withholding. Apparently, the system regards any sale of those stocks as dividend or partner share distribution, thus it charges 10%. Those stocks have LP in the company name.

Anyone has such experience?

 

[Robert Morse]

trend2009- When you file a W8BEN or WBBEN-E with a US based broker, there is always an IRS NRA withholding of Dividends and Interest payments. The default rate is 30% but some countries have treaties with lower rates. https://www.irs.gov/individuals/international-taxpayers/nra-withholding

 

[trend2009]

I found out the withholding is due to new irs policy.
https://help.wealthsimple.com/hc/en-ca/articles/11075214113179

This makes trading more complex for algo traders. Anyone has a complete list of those stocks?
And you have to update those lists with time

 

[NorgateData]

We've been discussing this for for a while here:
https://www.elitetrader.com/et/thre...raded-partnerships-effective-1-1-2023.371128/

For the most part, if you're able to exclude MLPs you'll avoid the majority of these types of securities. It was a bit ugly in the beginning with some ETFs also falling under this umbrella but were subsequently excluded.

 

[trend2009]

We've been discussing this for for a while here:
https://www.elitetrader.com/et/thre...raded-partnerships-effective-1-1-2023.371128/

For the most part, if you're able to exclude MLPs you'll avoid the majority of these types of securities. It was a bit ugly in the beginning with some ETFs also falling under this umbrella but were subsequently excluded.

Thanks. I did not pay attention to this topic and thus was hit by this. The rule does not make sense since aapl also has US sourced income. Nevertheless, it is a rule now. I will try to exclude any stock which has partner or unit in its name.

 

[d08]

Exclude them: https://ibkr.info/node/4706

 

[trend2009]

Exclude them: https://ibkr.info/node/4706

Thanks. It is a long list

 

[Maverick2608]

At IB they are excluded per default. You enable trading of them if you want.

Does anybody know how it works at Schwab? Are they excluded at Schwab per default or do you need to be on the lookout always yourself?