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Green Card Application & Taxes

Green Card Application & Taxes

Old Mar 22nd 2014, 9:45 pm
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Default Green Card Application & Taxes

Hi,

Moving on from my last post about the FBAR....

Currently going through the Green Card process but within the UK (consular process). So in Jan 27th 2013 my L1 Visa expired and have been back home since, in November I sold a house that I had inherited years before but my Tax attorney is now suggesting as going through the GC process, it does have an impact on my US Taxes...so I'm really worried about being hit bc of the above sale.

To me, I'm in the UK and the sale was below all the tax hits but why is my Tax attorney suggesting I am possibly liable and will that cover any inheritance?

Cheers
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Old Mar 22nd 2014, 10:14 pm
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Default Re: Green Card Application & Taxes

Originally Posted by Icklerichie View Post
To me, I'm in the UK and the sale was below all the tax hits but why is my Tax attorney suggesting I am possibly liable and will that cover any inheritance?
Since you have a tax attorney, why not ask him?

Do you meet the "substantial presence test" for 2013?
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Old Mar 22nd 2014, 10:25 pm
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Default Re: Green Card Application & Taxes

I have a couple of times but he hasn't answered the question, we just have a meeting setup for Tuesday but seems so long off and worrying a bit.

Yes, I meet the 'substantial prescence test'
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Old Mar 22nd 2014, 10:31 pm
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Default Re: Green Card Application & Taxes

Yes it does affect your taxes, have a read of IRS publication 519. If you were tax resident in the US. What you could do is file dual-status for 2013 (as it sounds as though you were only present for 27 days), assuming you actually left the US and then file dual-status again for 2014 when you actually get LPR status. Thereby avoiding the transaction being covered by US taxes.

Also if you are tax resident in the US, the IRS would calculate the ACB from the date you inherited it, not the date you become tax resident. Which obviously has serious capital gains tax implications.
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Old Mar 22nd 2014, 10:31 pm
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Default Re: Green Card Application & Taxes

Originally Posted by Icklerichie View Post
I have a couple of times but he hasn't answered the question, we just have a meeting setup for Tuesday but seems so long off and worrying a bit.

Yes, I meet the 'substantial prescence test'
Well, if you do meet the substantial presence test, then the IRS considers you to have been a US resident for tax purposes in 2013 and you are going to have to file a US tax return.

Whether that means that you are going to end up paying any US capital gains tax on the sale of the property will depend on a whole lot of circumstances that, hopefully, your tax attorney will be able to help you figure out.

I believe that the US and the UK have different rules for calculating the basis of inherited property when calculating the capital gain so that could complicate things.

Remember that just because you have to file a US tax return doesn't necessarily mean that you will have to pay any US taxes.
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Old Mar 22nd 2014, 10:32 pm
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Default Re: Green Card Application & Taxes

Originally Posted by Icklerichie View Post
Yes, I meet the 'substantial prescence test'
Do you? If you were in the US in a non-immigrant category for only 27 days in 2013 you could be considered a non-resident for tax purposes if you file dual-status for that year.
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Old Mar 22nd 2014, 10:43 pm
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Default Re: Green Card Application & Taxes

Thank you for the responses so far.

I have already completed a UK Tax return just recently for April 2012 to March 2013...but the same Tax person will be doing one in the future for Apr 2013 to March 2014 (which should cover the sale).

Current, a US tax attorney is going through my 2013 US Tax return but in theory it only should cover the 27 days for January 2013.
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Old Mar 22nd 2014, 10:44 pm
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Default Re: Green Card Application & Taxes

If you were really only in the US for 27 days in 2013 then you don't meet the substantial presence test for 2013.
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Old Mar 22nd 2014, 10:52 pm
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Default Re: Green Card Application & Taxes

unless I'm reading it wrong, I was in the US all year for both 2012 & 2011...so with the 27 days for 2103 it = 208 days
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Old Mar 22nd 2014, 10:55 pm
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Default Re: Green Card Application & Taxes

Originally Posted by Icklerichie View Post
unless I'm reading it wrong, I was in the US all year for both 2012 & 2011...so with the 27 days for 2103 it = 208 days
You need to have been in the US for at least 31 days in the "current year" ie 2013.
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