QUESTION:
1. My husband and I have sold a property in AZ but cannot close the deal
until we get an ITIN. We get conflicting advice as to how to complete the
form, even from IRS agents and have been rejected twice. What options do we
tick off and what accompanying documents are actually required?
2. We know we will have to complete a few other US tax forms this year and
would like to know an tax accountant in TUCSON who knows Canadian needs (not
Mexican). Can you recommend anyone?
3. The requirement to be less than 184 days in the USA in a The US calendar
year states that 'days in transit' are not included. Does apply to driving
through the country to reach one's destination (US home)? We are 3 days
over since we had to come early to try to resolve this W-7 requirement;
should we be diligent about leaving the country before Dec. 31st this year?
=============================
david ingram replies:
Congratulations, this is the only question I picked out of 37 to answer
today.
1. There is no reason that you cannot close the deal without an ITIN. On
Dec 17, 2003 the rules were changed and it became impossible to get an ITIN
until you filed the tax return. I have at least a dozen returns right now
where the properties have been sold without an ITIN. The Escrow agent sends
the money off on form 8288 without a number.
2. Each of the owners needs to complete a federal form 1040NR and an Arizona
140NR. The 1040NR requires pages 1, 2, 5 and a Schedule E and the completion
of AMT (alternative Minimum Tax) Form 6251. Note that on form 6251, you
have to write RPI beside line 30 and change the amounts according to the
instructions. None of the computerized programs I have bought will do the
calculation correctly for a non-resident. I do not know of anyone in Tucson
who does it. We would be happy to assist by email, snail mail, fax or
courier.
3. The US has the right to tax you on your world income if you are in the
USA for more than 183 days in any calendar year. You do NOT want to be
there for more than 183 days. Transit days refer to in transit from country
to country and does not apply to going into the US with a US destination.
(i.e. You are driving from Winnipeg to Mexico City - the days in transit
"through" the country do not count.)
So the answer is that you:
A. Sell the property and the Escrow Agent sends 10% to the IRS using From
8288. There should be one 8288 for you and one for your husband showing
half of the sale and half of the tax withheld.
B. You will do the tax returns and submit the W7 forms with "US" certified
copies o f the required documents with the return.
I am not sure where you live from your email address (sometimes I can make a
pretty accurate guess). If you are anywhere near the border, the easiest
method of dealing with this is to drive the US tax return to the
Social Security Office (i.e. in the 100 block of Magnolia in Bellingham)
They take your application along with the tax return and send the return
along with a certified W7 Application. Much simpler if you can find the
time.
IF YOU NEED HELP WITH THE RETURNS, ETC. YOU NOW KNOW WHERE WE ARE.
AND, if you wanted a free couple of minutes phone call, you can call as
follows:
==================
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