Tax guide for investors who pay tax in the US

The basic principle

When you sell an asset in a taxable brokerage account (not in an IRA or 401(k)), you realize a capital gain or loss.
The math is simple: sale price minus cost basis.

Example:

• Purchase: 100 shares at $8 = $800

• Sale: 100 shares at $12 = $1,200

• Capital gain = $400

If you sell below what you paid, you have a capital loss, which in turn reduces your tax.

Offsetting losses

From a tax point of view, losses are worth their weight in gold.

• First, gains and losses are netted against each other.

• If your losses exceed your gains, up to $3,000 a year can be deducted from your ordinary income (your salary, for example).

• Any excess can be carried forward indefinitely.

That makes targeted tax-loss harvesting a key tool for investors.

Short-term vs. long-term gains

This is where the US really stands apart.

• Short-term gains (held ≤ 1 year) are taxed like earned income, at your personal rate, which can reach 37%.

• Long-term gains (held > 1 year) benefit from preferential rates:

  • 0%

  • 15%

  • 20%

Which rate applies depends on your taxable income.

Tax year 2026 (single):

• Taxable income up to $49,450 → 0%

• $49,451 to $545,500 → 15%

• $545,501 and above → 20%

For married couples filing jointly, the 0% rate applies up to $98,900, the 15% rate up to $613,700, and 20% above that.

In other words: if you hold strategically and sell at the right time, the tax savings can be enormous.

Not all dividends are created equal.

• Qualified dividends: taxed like long-term capital gains (0/15/20%).

• Non-qualified dividends: taxed like ordinary income.

Most US corporations pay qualified dividends, while certain funds, REITs and foreign companies tend to pay non-qualified ones.

The 3.8% surtax

An extra layer is the Net Investment Income Tax (NIIT) of 3.8%.

• It kicks in at a MAGI of $200,000 (single) or $250,000 (married).

• It only applies to the amount above the threshold.

Example:
A single taxpayer has $210,000 of income, including $50,000 of capital gains. The 3.8% applies to $10,000. → Additional tax: $380.

The zero percent strategy

Especially interesting: the 0% window for capital gains and dividends.

Example:

• Marian earns $35,000 (ordinary income).

• She also has $20,000 in long-term capital gains.

• In 2026, the 0% rate applies up to $49,450.
  → Around $14,450 of her gains stay tax-free.

For middle incomes, this can be a genuine tax haven within the US system.

The IRS treats cryptocurrency as property, not currency.

That means:

• Every sale, swap or use of crypto is a taxable event.

• Gains and losses are treated like stocks, as capital gains and losses.

• Payments in crypto are taxable too.

Example:
Robert buys Bitcoin for $50,000. Its value rises to $90,000. He buys a boat and pays in BTC. → Taxable gain: $40,000.

Reorganizations and airdrops

• New tokens after a hard fork → taxable at fair market value when received.

• Airdrops and rewards → ordinary income, not capital gains.

Reporting requirements

Since 2021, the crypto question has been front and center on page 1 of Form 1040:
"Did you receive, sell, exchange or otherwise dispose of a digital asset?"

Getting it wrong can have serious consequences, up to and including criminal proceedings.

Step-up in basis

One big advantage of the US tax system: capital gains disappear when the owner dies.

Example:
John buys stock at $5, and it stands at $100 when he dies.

• No tax on the increase during his lifetime.

• His heirs take over the new cost basis of $100.

That makes holding long term, all the way to inheritance, attractive from a tax point of view.

Gifts

• Annual exclusion for 2026: $19,000 per donor and recipient; $194,000 for a spouse who is not a US citizen. The lifetime estate and gift tax exemption for 2026 is $15,000,000.

• No income tax for the recipient.

• Important: the original cost basis carries over to the recipient.

Example:
Jane gives her granddaughter Susan stock worth $1,000, with a cost basis of $200.
→ Susan's basis is $200. If she sells, the gain is calculated from that basis.

1. Watch the holding period: a single day can decide whether your gain is taxed at 20% or 37%.

2. Use tax-loss harvesting: realize losses deliberately to offset your gains.

3. Manage your income: shift your gains into lower-income years and you may land in the 0% bracket.

4. Check how your dividends are structured: look for "qualified dividends".

5. Document crypto with discipline: be able to prove every single transaction.

6. Plan your estate: the step-up in basis can secure tax advantages for generations.

Many of the firm's clients run into extra complexity:

• Tax treaties: many European countries have treaties with the US designed to prevent double taxation. For a US tax treaty to actually work in your case, you need to clarify where you are tax resident and which income is taxed in which country.

• FATCA reporting: US persons must report their foreign accounts.

• Drawing the line with your home country: if you become tax resident in the US, you need to check carefully which income is taxed where.

One wrong step, and suddenly the tax office back home wants its share after all.

The US gives investors plenty of room for tax planning, far more flexibility than a flat capital gains tax. Understand the system and you can save serious money. At the same time, the rules are full of pitfalls, especially for foreigners and dual citizens.

If you invest in the US or have moved there from Europe, have your situation reviewed by professionals. At Mount Bonnell Advisors, we specialize in where European and American tax rules meet. We help you:

We help you:

• Structure your investments in the most tax-efficient way.

• Report capital gains and dividends correctly.

• Avoid double taxation.

• Build a clear strategy for crypto, gifts and inheritances.

👉 Tip: Don't wait until your tax return is due. Tax planning only works in advance. Plan early and you can end up saving five or six figures.

Book a consultation now To find out which brokers suit investors without a US residence, read our article on the 10 best US brokers for non-US residents. You'll find more articles under News.

Current as of: tax year 2026 under IRS Rev. Proc. 2025-32 (capital gains thresholds, gift tax exclusion, estate tax exemption). The amounts are indexed for inflation and updated every January.

Consultation & implementation

If you'd like to find out what this means for your own situation, the best step is to book a consultation.