Events 1. Purchased property in Miami as a home owner occupant on 05/16/2012 for $163,694 with 20% down conventional loan 2. Lived there till Sept 2013 before relocating to Seattle, WA due to new job. 3. Rented the Miami house till Nov 2015...
Mr. Souza has it right. You will be taxed on the gain. But, if you could keep it as your personal residence for two years, you'd have been able to avoid the gain tax of 15%.See question
My elderly wife was paying around $800 a year for property taxes. We payed this for some years after marriage. After the government found out I was below retirement age our property taxes increased to about $10,000 . Will getting a legal separa...
You need to consult with a local tax attorney on this and bring all the information. I'm not sure why the property taxes would go up by $9,200. This is not something that happens in my state.See question
I'm on a j2 visa with a valid EAD. my question is the taxes that I pay, should I enrol in 1+0 or 1+1. Don't have kids atm so it could either be one or the other. Any help will be greatly appreciated.
Withhold the maximum. You don't want to end up owing. Better to be safe than sorry on this.See question
This question is for my buddy. His two family members are legally immigrating to the US in couple of months. He wants to claim them as dependents on 2015 tax return. First question, can he claim them as dependents? Second question, Can he fa...
As I posted previously, you just need to have them comply with 50% residency/50% expense requirement and they can be dependents. The ACA may apply, but it depends on their coverage while abroad.See question
What is the limit on tax exemption if my spouse and I gift property to each other? We were told that we can gift property, vehicles and stocks to each other and fill out the relevant forms and save on tax.
There is no tax on gifts between spouses.See question
This question is for my buddy. His two family members are legally immigrating to the US in couple of months. He wants to claim them as dependents on 2015 tax return. First question, can he claim them as dependents? Second question, Can he fac...
He can claim them as dependents, but the test is if they live with him more than 50% of the year and if he pays more than 50% of their living expenses. There may be a an ACA penalty, but don't get too hung up on it.See question
Parents are thinking of taking out a home equity loan or a mortgage on their paid-off home to help me with student loan (and other) debt consolidation. We've determined this would be the best course of action to assist with lowering loan payments ...
You need to consult with a Tax Attorney in New York on these issues. There are a lot of options and a lot of play in what you can do.
There are multiple scenarios. Let's just say that if they give you $100,000 outright, there will be gift tax consequences beyond the $14,000 that is automatically excluded. But, you can get $14K as a gift, tax free, each year, from each parent.
So in Year 1 -- there can be $28,000 given to you, in Year 2 -- there can be $28,000 given to you, in year 3 -- there can be $28,000 given to you, and in year 4, there can be $16,000 given to you -- if done correctly -- with no tax consequences. Your parents, however, will be taxed when they pay back the loan.
Before delving into this further, I'd say this... even if they have gift tax consequences, it is superior to the consequences for you if it is formulated as a loan where you pay back monthly payments. Reason being is that there is something called "Cancelled Debt Income" that could get both you and your parents into trouble. This should be avoided.
If you are covering the monthly payment on the HELOC anyway, you are paying with after-tax income, so you will be shouldering the burden of taxes on the payment regardless. You just want to minimize it as far as possible.
The limit on the HELOC is $100,000 for it to be subject to the mortgage interest deduction, just as only the first $1,000,000 of home purchase is eligible for the mortgage interest deduction. The idea is they don't want to subsidize millionaires buying more expensive things and getting a tax break and anyone exceeding those numbers doesn't need the tax breaks which are primarily for the middle class.
They will get the benefit of the mortgage interest deduction on their payments if this isn't phased out. For income over about $170K you start to lose the benefit due to phase outs and Alternative Minimum Tax.
Having you on the deed is not wise, particularly if you have derogatory credit marks for student loan and other debt. Keep yourselves financially separate. In 5-10 years, you will have good credit and can become involved with property ownership and other investments then.
Hope this helps. It is a complex issue, but you are on the right track.See question
If you have a NYCHA apartment before you got married and put your spouse down as family composition, what tenacy rights does the spouse have? Ultimately what determines who has the greater right if you decide to divorce?
Pre-marital property is not subject to equitable distribution. If he/she shared in the leasehold this may alter the result. You should speak with a lawyer who deals in divorce about the consequences. Use the "Find a Lawyer" tool that Avvo has and seek a NY Divorce Attorney.See question
I am selling a condo unit which I purchased less than 1 year ago. I have foreign passport. Is there different tax treatment for non-US citizen or non-resident?
Ms. Syed has it right. As a permanent resident you are subject to the 30% withholding regime wherein you must pay over this amount toward the gain. A non-resident or NRA does not have the same obligations as a permanent resident.
But FIRPTA still comes into play even if you are a non-resident or NRA. And 10% of the gain can be collected on sale.
Best case scenario, you still have to pay capital gain rates for long term capital gain (if sold after 1 year, not yet the case) of 15%. 10% of the Amount Realized would also be collected for FIRPTA tax -- essentially, in order to ensure you actually pay the US taxes due. So you are talking a tax obligation of 15% to 25% of the gain as a best case.
You also have to factor in how you've been filing and whether you have made the elections to offset with any deductions, depreciation, etc. you may have.
All-in-all, there is a best case here, that can be determined pretty quickly with all the information. You just need to get a tax adviser involved to steer you through the intricacies.
You have to carefully analyze the following:
1 - how assets are held (personally or in corporate solution)
2 - does 30% backup witholding tax apply and/or is this ECI ("Effectively Connected Income")--the 2nd does not appear to apply
3 - do I have separate tax on gain for the US Property--reportable on 1040NR or Sched D if ECI
I recently married my wife who I met while she was her on a student visa (non working ). We never even lived together after college she went home to help family in asia. I have continued to live and work as a single individual financially. How d...
I had a similar situation with a client recently and could certainly answer any follow-up questions you may have.
This is a bit of a tricky issue. If you file married filing joint, you'll have to include her income earned overseas, if any.
If you file married filing separate, you'll be penalized and overpay.
If you file single, even though you are married, the return may be examined. However, and while it is legally a gray area, I believe in this situation, if she did not live with you, and you did not start a household together, then you can still file single until such time as she moves back in with you---and then you can start filing married filing joint---when she is in the US full time.
The reason I believe this is the case is that there are definitions and notes in various IRS regulations regarding filing status that give me good grounds to believe this is the proper approach. Admittedly, however, this is not the traditional advice and may be a bit risky. Thus, I would only recommend it if your wife had significant earnings overseas that should not be subject to US tax.
Another option is to file married filing joint, but claim Treaty Benefits for the foreign-source income she earned in Asia.
One last, important, point. Immigration wants to see a few years of tax returns, especially if she was a US Resident. If she is hear primarily on a Visa, I imagine you are getting into the process of filing to get her a green card and/or naturalize her soon. She apparently is not in a position to move-in with you full-time until she finishes school and would ostensibly then be in a position to enter the job market.
You want to reflect the marriage and reflect the consequences of marriage including tax filings are being respected -- before you have immigration interviews. So, I would consult an immigration attorney on this, and/or ask for whatever attorney you hire to work out the tax issue (if any) to give you some advice about the immigration process as well -- after fully setting out your plans.
Hope this helps!See question