Client in England (UK) wishing to purchase 2nd home in Georgia -
My_question_is: Applicable to both US and
Canada
Subject: Client in England wishing to purchase 2nd home in GA
Expert: [email protected]
Date: Monday March 19, 2007
Time: 02:20 PM -0500
QUESTION:
My client lives and is a citizen of England. She wishes to purchase a secondary home in Georgia. My question is what would her taxes be as a temporary resident of the US? Is there anything else that I could do for her? I have already advised her to speak with a Real Estate lawyer.
Thank you,
____________________________________________
david ingram replies:
I do not see any Canadian tie in here, Great Britain but not Canada but that is okay.
In general, if she is a non-resident of the US and this is a vacation home and she is in the US less than 183 days in any year she has no income tax liability to the US or Georgia other than on any income she receives if she were to invest other monies in the US.
With regard to the house, if and when she sells it, she will be subject to both Georgia and Federal tax on any capital gain.
_______________________________________________________________________________
If she happens to spend more than 120 days a year for three years in a row or 150 days one year and 120 the next, she will also fall within the substantial prescence test rule of the US.
In this case, they take the days that she is present in the US ths year - let's say 140 and add 1/3 of the 150 days she was there the year before and 1/6th of the days she was there two years before. If this adds up to more than 183, she must file a form 1040 or a 1040NR plus an 8840 to prove that she has a closer connection to another country.
You can see that if a person is there for
2008 150 days 150
2007 90 days x's 1/3 30
2006 120 days x's 1/6th 20
for a total of 200 days which now requires forms 1040NR and 8840 to be filed.
Suggest that she goto www.centa.com and read the April 1994 newsletter in the top left hand box. This 13 year old newsletter makes the point that this is not new.
And, of course, if she is there for moe than 183 days in any one year whe is taxable in the USA on her world income and will file Federal Form 1040 and Georgia form 500
Subject: Client in England wishing to purchase 2nd home in GA
Expert: [email protected]
Date: Monday March 19, 2007
Time: 02:20 PM -0500
QUESTION:
My client lives and is a citizen of England. She wishes to purchase a secondary home in Georgia. My question is what would her taxes be as a temporary resident of the US? Is there anything else that I could do for her? I have already advised her to speak with a Real Estate lawyer.
Thank you,
____________________________________________
david ingram replies:
I do not see any Canadian tie in here, Great Britain but not Canada but that is okay.
In general, if she is a non-resident of the US and this is a vacation home and she is in the US less than 183 days in any year she has no income tax liability to the US or Georgia other than on any income she receives if she were to invest other monies in the US.
With regard to the house, if and when she sells it, she will be subject to both Georgia and Federal tax on any capital gain.
_______________________________________________________________________________
If she happens to spend more than 120 days a year for three years in a row or 150 days one year and 120 the next, she will also fall within the substantial prescence test rule of the US.
In this case, they take the days that she is present in the US ths year - let's say 140 and add 1/3 of the 150 days she was there the year before and 1/6th of the days she was there two years before. If this adds up to more than 183, she must file a form 1040 or a 1040NR plus an 8840 to prove that she has a closer connection to another country.
You can see that if a person is there for
2008 150 days 150
2007 90 days x's 1/3 30
2006 120 days x's 1/6th 20
for a total of 200 days which now requires forms 1040NR and 8840 to be filed.
Suggest that she goto www.centa.com and read the April 1994 newsletter in the top left hand box. This 13 year old newsletter makes the point that this is not new.
And, of course, if she is there for moe than 183 days in any one year whe is taxable in the USA on her world income and will file Federal Form 1040 and Georgia form 500
david ingram
Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office)
$1,600 would be for two people with income from two countries
David Ingram expert income tax help and preparation of US Canada Mexico non-resident and cross border returns with rental dividend wages self-employed and royalty foreign tax credits family estate trust trusts income tax convention treaty
---------------------------------------------------------------------------------------------------------------
David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
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North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office)
Disclaimer: This question has been answered without detailed
information or consultation and is to be regarded only as general
comment. Nothing in this message is or should be construed as advice
in any particular circumstances. No contract exists between the reader and the
author and any and all non-contractual duties are expressly denied. All
readers should obtain formal advice from a competent and
appropriately qualified legal practitioner or tax specialist
for expert help, assistance, preparation,
or consultation in connection with personal or
business affairs such as at www.centa.com. If you forward this message,
this disclaimer must be included."
Be ALERT, the world needs more
"lerts"
David Ingram gives expert income
tax & immigration help to non-resident Americans & Canadians from
New York to California to Mexico to Great Britain family,
estate, income trust trusts Cross border, dual citizen - out of
country investments are all handled with competence &
authority.
Phone consultations are $400 for 15 minutes to 50
minutes (professional hour). Please note that GST is added if product remains in
Canada or a phone consultation is in Canada.
This is not intended to be definitive but in
general I am quoting $800 to $2,800 for a dual country tax return.
$800 would be one T4 slip one W2 slip one or two
interest slips and you lived in one country only - no self employment or rentals
or capital gains - you did not move into or out of the country in this
year.
$1,000 would be the same with one rental
$1,200 would be the same with one business no
rental
$1,200 would be the minimum with a move in or out
of the country. These are complicated because of the back and forth foreign tax
credits. - The IRS says a foreign tax credit takes 1 hour and 53
minutes.
$1,500 would be the minimum with a rental or two in
the country you do not live in or a rental and a business and foreign tax
credits no move in or out
$1,600 would be for two people with income from two countries
$2,800 would be all of the above and you moved in
and out of the country.
This is just a guideline for US / Canadian
returns
We will still prepare Canadian only (lives in
Canada, no US connection period) with two or three slips and no capital
gains, etc. for $150.00 up.
With a Rental for $350
A Business for $350 - Rental and business likely
$450
And an American only (lives in the US with no
Canadian income or filing period) with about the same things in the same range
with a little bit more if there is a state return.
Moving in or out of the country or part year
earnings in the US will ALWAYS be $800 and up.
TDF 90-22.1 forms are $50 for the first and $25.00
each after that when part of a tax return.
8891 forms are generally $50.00 to $100.00
each.
18 RRSPs would be $900.00 - (maybe amalgamate a
couple)
Capital gains *sales) are likely $50.00 for
the first and $20.00 each after that.
Just a guideline not etched in
stone.
This from "ask an income trusts tax and immigration expert"
from www.centa.com or www.jurock.com or www.featureweb.com. David Ingram deals on a daily
basis with expatriate tax returns with multi jurisdictional cross and
trans border expatriate problems for the United States, Canada, Mexico,
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