tax UK property US taxes..? when and how much

[Tel1 0]

Hi I'm British, my wife is american. we have been issued a visa to enter the US and collect a green card for me. I have until 7th Oct to do this. I am planning on selling my flat here and the gains made will come with me to the US. However I want to enter officially with my pack etc before 7th Oct, get my temporary green card and then come back to the UK to sell my flat. What I've been reading is that a US green card holder is taxed internationally the same as a US citizen. So when I sell my property I would have  got my temporary green card, been in the US for a weekend and back living and working in the UK. So do I have to pay tax on the gains made of the sale and how much??? if so if I managed to sell my property before would i be taxed if I entered after the sale went through and the money was in my account?

[ddtenor2 80]

I am not a tax expert, but I do believe that a non-USC spouse's income is subject to U.S. taxes no matter where you are living.  I am pretty sure you are required to report all income for the year, even if you marry on December 31st.  There are deductions for taxes paid in other jurisdictions, so you shouldn't be taxed twice on the income.  I would definitely recommend that you consult with a tax attorney or CPA who has experience in filing taxes for a "multinational" couple.  The IRS code is complicated enough for a USC married couple--let alone for a couple where one spouse is not a USC and has lived and worked abroad for a portion of the tax year.

[Tel1 0]

21 minutes ago, ddtenor2 said:

I am not a tax expert, but I do believe that a non-USC spouse's income is subject to U.S. taxes no matter where you are living.  I am pretty sure you are required to report all income for the year, even if you marry on December 31st.  There are deductions for taxes paid in other jurisdictions, so you shouldn't be taxed twice on the income.  I would definitely recommend that you consult with a tax attorney or CPA who has experience in filing taxes for a "multinational" couple.  The IRS code is complicated enough for a USC married couple--let alone for a couple where one spouse is not a USC and has lived and worked abroad for a portion of the tax year.

Thanks ddtenor2 I didn't even consider any spouse taxes. the Mortgage is all in my name but I guess it does't matter if we are married. Yes we are starting to contact experts now. IN the UK we don't pay capital gains tax on private property so it's a shock to me that I might have to pay the US 20% for a sale of a property they had no influence over and that I would be a US resident alien for a such a short time at time of sale. appreciate you taking the time.

[EM_Vandaveer 2,408]

~~~ Moved to "Tax & Finances During US Immigration" ~~~

[EM_Vandaveer 2,408]

https://www.ft.com/content/54bedb30-b10d-11e4-9331-00144feab7de

Both the US and UK offer tax exemptions on the sale of a principal personal residences (...). US rules require you to have lived in the property for at least two of the past five years.

[tamcloud 92]

I agree that you should consult a tax attorney or CPA. However, I Googled the question and saw a few sources you could start with/consider:

 

U.S. taxes on the Sale of foreign home: https://www.thebalance.com/us-taxes-on-sale-of-foreign-home-3973966

Foreign real estate U.S. IRS tax rules you must follow: http://www.escapefromamerica.com/2011/03/tax-rules-when-you-own-and-rent-property-abroad/

FAQs about international individual tax matters: https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-about-international-individual-tax-matters

 

None of them match your exact situation but come close considering you're married to a USC. Upside is, you'd likely qualify for a tax credit, as long as you resided at the property for at least the past 2 years vs it being a rental property for which you gained income.

Edited July 28, 2018 by tamcloud

[Wuozopo 4,293]

3 hours ago, Tel1 said:

Hi I'm British, my wife is american. we have been issued a visa to enter the US and collect a green card for me. I have until 7th Oct to do this. I am planning on selling my flat here and the gains made will come with me to the US. However I want to enter officially with my pack etc before 7th Oct, get my temporary green card and then come back to the UK to sell my flat. What I've been reading is that a US green card holder is taxed internationally the same as a US citizen. So when I sell my property I would have  got my temporary green card, been in the US for a weekend and back living and working in the UK. So do I have to pay tax on the gains made of the sale and how much??? if so if I managed to sell my property before would i be taxed if I entered after the sale went through and the money was in my account?

 

You will most likely file jointly so all gains, income from either of you go into the pot. It's not like your wife is also going to separately owe tax on your house sale. It's his, hers, ours, all thrown into one tax form.  

 

Terminology is important when you talk income tax. Some will say you are taxed on your foreign income or gains. You will report those (if it's a joint return) for the entire tax year, but reporting does not mean it's taxed  by the US. Your income prior to the greencard would qualify for a foreign income exclusion. Income when you go back and work will not be excluded, but if you pay foreign taxes after greencard, that portion can be deducted from your tax bill. You can't double dip and exclude income and claim a foreign tax credit for the same money.  But you can exclude foreign income for time before POE  and flip to foreign tax paid credit for after POE.

 

 Anybody who sells their primary residence gets to exclude gain up to a certain amount before any taxes are applied. And things like the cost to sell it and such also get taken off the gain. So the date you sell probably won't impact your taxes. You don't get a "tax credit" for the gain as stated in another reply. You get to exclude the gain from your taxable income. Tax credit means an amount taken off your final tax bill. It's like at the grocery store when they have totaled everything out and you hand over a coupon to reduce the final bill.  It's just a terminology thing to learn. Exclusion sorta means it doesn't get piled on to your other income giving you a whole lot more to be taxed on. Tax credit is like the coupon turned in after the grocery bill is calculated.