Taxation of Dual-Status (Australian-US) Alien

My_question_is: Applicable to Another Jurisdiction or Multi-jurisdictions
Subject: Taxation of Dual-Status (Australian-US) Alien
Expert: [email protected]
Date: Monday March 12, 2007
Time: 04:39 PM -0500


Hi, I am an Australian citizen holding a US green card and have been working in the US since Jun05. I have some questions regarding my income/losses from my assets in Australia (investment property and shares) due to my permanent residency in the US. I’m not sure how it would work, considering I am a resident in the US but a citizen in Australia and by law I have to lodge my tax return in both countries. Do I have to report my losses/income in my Australian tax return or by law I have to also report in the US? Under the tax treaty between the two countries, if I report it in Australia do I still have to report them in my US tax return? I’m very confused as to whether offset my US income vs. Oz losses to get my return in the US now or only report them in my Oz tax return and wait until in few years time I return to Australia? What happens if I sell a property in the meantime, do I need to pay the cpital gain tax here or in Australia or both? I do not want to pay tax twice and
I do not want to not paying enough tax under each country's law. I do really apprecciate if you could assist me in this complicated matter.


david ingram replies:

You are one of seven Australian / Canada / USA questions that came in today and the only one being answered in our free forum.

As a US green card holder you are taxable on your world income. That means you must report:
* the interest on a trust account in the Bahamas
* the sale of stock held on the Isle of Mann
* A rental condo in Vancouver
* stock in Australia
* real estate rentals in Australia
* profits from a bus line in Finland (just did that)
* fees for services provided in Australia, South Africa, Germany, etc. over the Internet
* any other income you earned from investment or services or royalties or trailer fees from anyplace in the world.

You can read the US Australian Tax treaty at

This will show you that you are also taxable in Australia first on rents (Art VI), dividends 15% (Art X), interest 10% (Art XI), Royalties 10% (Art XII), Business profits from a permanent establishment (Art VII), sale of real estate or real estate shares (Art XIII), Social Security Pensions (Art XVIII) and so on.

Capital Gains on publicly traded shares are not taxable in Australia when owned by non-residents.

And, if you are living in the US with a Green card, you are NOT taxable in Australia on your US wages, interest, dividends, etc Under Article IV of the Treaty.

Any tax you pay to Australia may be claimed on your US return by filling in US form 1116.

If you have a US green card and are just asking this question 'now', I 'know' your US returns are wrong. Your Australian are likely wrong as well because i will bet that you filed as a resident..

We would be happy to bring both the Australian and US returns up to date for you.