UK tax year and declaring during the first year.

[PoohBear72 22]

Hi Everyone,

I have sold my home this year with a profit of less than £10,000 after estate agency and solicitor fees. It is likely that I will become a Conditional Resident later this year.

In the UK the tax year comes to an end on March 31st each year. Publication 519 says "If you have previously established a regular fiscal year (12 consecutive months ending on the last day of a month other than December, or a 52–53 week year) and are considered to be a U.S. resident for any calendar year, you will be treated as a U.S. resident for any part of your fiscal year that falls within that calendar year. " Does this mean that in my first year I will have to declare income from April 1st to December 31st? If this is the case will I need to declare the sale of my house?

If I do have to declare the sale of my house will I need any paperwork (evidence) to show that I sold my house and the amount of the proceeds for tax purposes?

Thanks.

[PoohBear72 22]

Has anyone sold their home and then got their CR visa in the same tax year? How did you deal with putting the proceeds on the tax form?

[PoohBear72 22]

From the look of the general responses in these links:

http://www.visajourney.com/forums/topic/437101-selling-house/

http://www.visajourney.com/forums/topic/60426-amount-of-money-you-can-bring-into-the-us/page-2

http://www.visajourney.com/forums/topic/381126-how-much-cash-can-one-bring-into-the-us/

If seems that if you sell your property prior to getting resident status you can transfer the proceeds without tax concerns as the transaction (sale of property) was completed prior to having tax obligations to the US?

Does anyone know of a forum like Visa Journey for US Tax advice?

[CarlosAndSveta 808]

The first $250,000 of gain, $500,000 on a joint return, from the sale of your home can be excluded from your U.S. tax return. If the gain can be excluded then nothing has to be reported on the tax return. See IRS Publication 523 - Selling Your Home. Here is the link to the publication: http://www.irs.gov/pub/irs-pdf/p523.pdf

[PoohBear72 22]

Fantastic! :-)

Your link makes me feel way more secure in my belief of what I should do now.

According to the following link, because the sale is not in the US and not linked to the US in any way AND I am an Non Resident Alien rather than an LPR, it wouldn't be taxable anyway. But your link to the IRS documentation makes it as clear as daylight. I pass the Ownership and use tests too!

Thanks Carlos & Sveta, this has been driving me up the wall all day.

Maybe this is of use to others, It was helpful to me. http://www.gtn.com/US_Taxation_of_Foreign_Nationals.pdf

[Owen_London 65]

Hi Everyone,

I have sold my home this year with a profit of less than £10,000 after estate agency and solicitor fees. It is likely that I will become a Conditional Resident later this year.

In the UK the tax year comes to an end on March 31st each year. Publication 519 says "If you have previously established a regular fiscal year (12 consecutive months ending on the last day of a month other than December, or a 52–53 week year) and are considered to be a U.S. resident for any calendar year, you will be treated as a U.S. resident for any part of your fiscal year that falls within that calendar year. " Does this mean that in my first year I will have to declare income from April 1st to December 31st? If this is the case will I need to declare the sale of my house?

If I do have to declare the sale of my house will I need any paperwork (evidence) to show that I sold my house and the amount of the proceeds for tax purposes?

Thanks.

Your US tax reporting year will be a calendar year. If you get permission from the IRS, you can change the start date, but that is very rare.

This page may be useful to you: http://www.irs.gov/Individuals/International-Taxpayers/Dual-Status-Aliens

If you elect to file a joint return with your spouse for the entire year then you would need to declare your UK income and capital gains during the relevant US tax year. Sometimes the dual taxation treaty between the US and UK provides a tax credit in the US that gives you a substantial refund.

[PoohBear72 22]

It seems that I won't have to put anything on my return about the small gain from the sale of my house because I don't meet the Capital Gains threshold of $250,000. (IRS Publication 523 page 19 - reporting the sale)

Also it seems that if I file Married Filing Separately I would only put US sourced income (from work in the US or in connection with US companies) on the return for before I get my Visa (as an NRA). I currently haven't worked in the UK or anywhere this year, so it's looking like there might be a lot of zeros on the NRA return. For the part of the year I have my visa and have entered the states I understand that I will be taxed on all world income, which will just be what I earn in the US.

Do you think there will be a problem filing a zero NRA tax return? It would truly represent my position. I am living on my savings at this point.

[Owen_London 65]

Does you wife have income this year? If so, you are likely to be better off using married filing joint for 2014.

Also, if you have no income for 2014, you may not need to file for yourself if filing separately, but you'd need to confirm that.