Stock trading while waiting for EAD?

[TrinitySnow 10]

My EAD status is still "Case Is Being Actively Reviewed By USCIS" and my AP status is "Case Was Received And A Receipt Notice Was Sent". Visajourney is estimating that I should receive it end of Feb/early March which would align with the current estimate of 6-months to receive the combo card from when you did your biometrics.

 

I know that stock trading while without the EAD is a grey area since there's no official information on it. I've seen multiple posts of people saying it's not allowed, some saying it's not certain or best not to take that chance.

 

What I'm wondering now is the following scenario:

• I open a taxable brokerage account in December 2021 and start trading
• Receive EAD before April 2022
• Files taxes using the 1099 that I received

 

The more I type the more I'm thinking I won't be able to do this since the 1099 will show that I earned gains in 2021 but the EAD will show that the validation date is from MM/DD/2022.

 

I'd like to hear more opinions about this though. 

[Redro 4,611]

6 hours ago, TrinitySnow said:

My EAD status is still "Case Is Being Actively Reviewed By USCIS" and my AP status is "Case Was Received And A Receipt Notice Was Sent". Visajourney is estimating that I should receive it end of Feb/early March which would align with the current estimate of 6-months to receive the combo card from when you did your biometrics.

 

I know that stock trading while without the EAD is a grey area since there's no official information on it. I've seen multiple posts of people saying it's not allowed, some saying it's not certain or best not to take that chance.

 

What I'm wondering now is the following scenario:

• I open a taxable brokerage account in December 2021 and start trading
• Receive EAD before April 2022
• Files taxes using the 1099 that I received

 

The more I type the more I'm thinking I won't be able to do this since the 1099 will show that I earned gains in 2021 but the EAD will show that the validation date is from MM/DD/2022.

 

I'd like to hear more opinions about this though. 

Have you considered opening an account in your spouse's name and being a beneficiary on said account? 

Talk through all the trades with your spouse and have them be the operator of the account. 

[millefleur 5,046]

13 hours ago, TrinitySnow said:

The more I type the more I'm thinking I won't be able to do this since the 1099 will show that I earned gains in 2021 but the EAD will show that the validation date is from MM/DD/2022.

Pretty much. If stocks generate income, that needs to be reported to the IRS and tax will need to be paid. I would not risk it as income earned is basically "work." The IRS does not care as long as you pay them but it's a USCIS/immigration law issue. It seems to me the definition of "work" through the immigration lens is ridiculously broad: any kind of job done for money or any kind of job that might take away an American's ability to do said job (i.e. a parent-in-law doing child care) can be viewed by USCIS as work.

 

I personally would not risk trading stocks in your name until you have the EAD card. As you mentioned above, better not take the chance.

 

[WeekendPizzaiolo 47]

16 hours ago, TrinitySnow said:

My EAD status is still "Case Is Being Actively Reviewed By USCIS" and my AP status is "Case Was Received And A Receipt Notice Was Sent". Visajourney is estimating that I should receive it end of Feb/early March which would align with the current estimate of 6-months to receive the combo card from when you did your biometrics.

 

I know that stock trading while without the EAD is a grey area since there's no official information on it. I've seen multiple posts of people saying it's not allowed, some saying it's not certain or best not to take that chance.

 

What I'm wondering now is the following scenario:

• I open a taxable brokerage account in December 2021 and start trading
• Receive EAD before April 2022
• Files taxes using the 1099 that I received

 

The more I type the more I'm thinking I won't be able to do this since the 1099 will show that I earned gains in 2021 but the EAD will show that the validation date is from MM/DD/2022.

 

I'd like to hear more opinions about this though. 

I am glad you are being careful. There are many characteristically different investing styles including:

• (a) passive index investing (plug-n-chug spreadsheet stuff, done in 5 minutes per quarter)
• (b) periodic active investing (reading earnings reports, making monthly or quarterly decisions on existing positions, often holding long)
• (c) day trading (hours of daily research and activity per day).

The idea that stock trading might be considered work had not occurred to me as I am a US citizen. However, (a) and (b), as long as they involve only a few person hours per year seems much lower risk than (c). Moreover, stock trading that is for your own personal benefit, and not investing for others (e.g. friends, a firm with LPs, etc.) is lower risk. Any reasonable person would assume that unloading the car of groceries, vacuuming, or cooking a meal for your own personal benefit is clearly not work. Whether this extends to periodic stock trading for personal benefit is beyond my pay grade and it may be worth paying for an hour or two of an immigration lawyer's time.

 

The website https://www.immigrationcases.org/f1-visa-work/ mentions:

Quote

a good rule-of-thumb is to make sure that your day-trading is a “hobby.” The U.S. Department of Labor defines a “hobby” as something you spend less than 500 hours doing in one year. If you want to day-trade on an F1 visa then it should be listed on your tax returns as a “hobby” assuming that you spent less than 500 hours doing it. There’s still a risk, however. If you’re studying something like finance or business, Immigration could still call it “work” because it’s so closely related to your degree of study.

This immigration attorney covers the issue of how USCIS vs DOL vs IRS define work and income: https://www.albany.edu/isss/assets/Fall 2020 Making Money in the U.S. Legally.pdf.

 

It is rather unfortunate that USCIS often uses broad definitions. Let's hope that these rules never broaden to book reading or TV watching. Otherwise, AOS will get even more painful.

[ssynaasy 0]

Your idea is quite good, and I recommend you follow the proposed steps. It all sounded quite logical.

[Ontarkie 14,223]

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