I have a Canadian client who sold their Maui vacation condo and has the HARPTA/FIRPTA

tax of 22.5% withheld on their sale in escrow.  It was not a rental unit just used for the family

for a vacation home.  When I do the 1040 and Hawaii N-15 they have no income in

the United States thus they should pay $0 tax on the capital gain - correct?

They paid $175,000 in 2016 and sold in 2020 for $340,000 - I assume they are not 

entitled to the $250,000 capital gain exemption if they lived there 2 out of the past 5 years

since it is a vacation rental.  Any thoughts? Mahalo