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Sale of home

Forum|Forum|5 years ago
January 22, 2021
10 replies
58 views

Hello,

US citizen who leaves abroad sold his property and would like to qualify under topic 523 'Selling your home'.

More details:

- The individual did not reside in this property since according to him 'it was too small for his 7 person family'.

- That's the only property this individual had prior to the sale. He rented another house for his family.

- The individual used the consideration to buy another house which he currently resides in.

- There is no taxes in the country which the property is located. The sale is fully exempt.

My first reaction would be that this transaction does not qualify for gain exclusion from home selling.

I would like to hear from you what do you think.

Thanks,

ProSeries Basic

This topic has been closed for replies.

Best answer by sjrcpa

Correct. No exclusion.

sjrcpaAnswer

Level 15

Correct. No exclusion.

The more I know the more I don’t know.

abctax55

Level 15

Unless s/he - he - they had quintuplets that "made the house too small" ... I vote with no exclusion.

HumanKind... Be Both

IRonMaN

Level 15

Sometimes my curiosity gets the best of me. If he didn't reside in the house, what was the house used for while he owned it?

Slava Ukraini!

S

shachar1831Author

Level 4

It was part of the time under construction/renovation, remained empty or was leased to others.

itonewbie

Level 15

Did he have a mortgage? If so, did you determine whether he had any §988 gain with each repayment?

---------------------------------------------------------------------------------Still an AllStar

S

shachar1831Author

Level 4

Valid point. Haven't gotten there. I know that part of the property was paid by taking a loan from the wife's brother but I do need to verify that there was no mortgage/other loan from the bank.

Honestly, I don't think he will remain my client after he will find out that he needs to pay taxes in the US. I believe I prefer that.

Thanks all for the inputs.

sjrcpa

Level 15

The rental income is reportable on the US return, too.

The more I know the more I don’t know.

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