Foreign Person Enters States and Gets Green Card. How to treat dividends?

[Hamacher]

I have a client that moved to the United States in August 2009. He received some passive income for which he had 15% tax withheld. When preparing his 2009 tax return, is the income that was earned prior to August taxable? If not, how is it presented on the return?

Thanks in adavance for you help!

[Hamacher]

Follow up

Here is the clients situation:

Situation is as follows:
1/1/09 to 5th Aug 09: Was outside US and non US citizen and non Green card holder.
6th Aug 09: Entered US on Green card through spouse.
IRS website says that I will taxed from 6th Aug 09 onwards.
From 6th Aug 09 to 31st Dec 09, I was unemployed stay at home dad. No W2 and no income.
I was employed by Amgen a US company, but in Europe during period 1.1.09 to 5th Aug 09.


My understanding of the 1099 is as follows:
All interests, dividends and capital gains from exercise of RSU prior to 6th Aug 09 (date of entry into US) are exempt from US tax, because I was then a foreigner non resident. So I should subtract from the 1099, all interests, dividends and capital gains from RSU exercise made prior to 6th Aug 09.


Is this correct?


Please also note that the RSU quantities exercised were the net quantities ie, some RSUs were already withheld to pay for tax liability and the remainder quantities were the after tax quantities which I exercised. So the cap gains tax should not be on the spread since the tax was already paid. In any case, I think that the cap gains here are not taxable for 09 by US, since it was exercised outside my residency period in the US and when I was an alien.