maui doug
Level 3
‎06-28-2021 09:56 PM

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

 

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Just-Lisa-Now-
Level 15
Level 15
‎06-28-2021 10:14 PM
Theyve got 165k in gain, which is US income, why would they pay 0 in tax?

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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poolcleaner
Level 9
‎06-28-2021 11:01 PM

Research the treaty tax situation between the US and Canada to see what the options are.

qbteachmt
Level 15
‎06-29-2021 11:05 AM

"if they lived there 2 out of the past 5 years"

You stated they live in Canada.

"since it is a vacation rental."

You stated it is not a Rental; a vacation home used solely by them? Are you trying to treat this as a second home?

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