Calculate capital gains tax on US stock trades
When you sell overseas stocks (such as US stocks) at a profit, you must pay capital gains tax. Unlike domestic stocks, overseas stock capital gains tax applies to all investors regardless of major shareholder status.
The tax rate is 22% (20% capital gains tax + 2% local income tax), with an annual basic deduction of approximately $2,500 (KRW 2.5 million).
Capital Gains = Sell Amount (KRW) - Buy Amount (KRW)
Taxable Base = Capital Gains - Basic Deduction (KRW 2.5M)
Capital Gains Tax = Taxable Base x 20%
Local Income Tax = Capital Gains Tax x 10%
Total Tax = Capital Gains Tax + Local Income Tax
Buy and sell amounts are converted to KRW using the exchange rate at the time of each transaction. Due to exchange rate fluctuations, you may have a loss in USD but a gain in KRW, so be careful.
If you trade multiple overseas stocks in the same year, you can net gains and losses together. For example, if Stock A has a $5,000 gain and Stock B has a $2,000 loss, the net capital gain is $3,000.
You can use Tax-Loss Harvesting by selling positions with unrealized losses at year-end to lock in losses, then repurchasing, to reduce your tax burden.