Home buying - Interesting situation
Jan 31st 2003, 1:24 am
#16
Here we go Pittsburgh!
Joined: Aug 2002
Location: Pittsburgh PA, USA
Posts: 581
Originally posted by frrussre
Once more, you will be liable for capital gains. Once you move to USA & take up residence, your rented or purchased home will become your "Primary Residence". Your home in UK will become your, "Secondary Residence" or holiday home. The $500k exemption on property sale, is only is only on your "Primary Residence".
Call the Federal Tax dept. There is a booklet on the subject. There is even an International Treaty between the USA & UK covering this subject. I will try to find the booklet #.
Reg. Frank R.
Ps. Jo Brayne:
My apologies, to you I was not suggesting you are stupid. I was rather harshly suggesting, the buyer should never pay the seller closing costs. Unless you are getting a cheap deal, "As is".
I shall put my arrogant attitude down to living in NYC for to long. Still off to the old country in 2 weeks, for refresher course in manners. Lets stay calm Lady's & gentlemen & try as Brits to help one & another.
Once more, you will be liable for capital gains. Once you move to USA & take up residence, your rented or purchased home will become your "Primary Residence". Your home in UK will become your, "Secondary Residence" or holiday home. The $500k exemption on property sale, is only is only on your "Primary Residence".
Call the Federal Tax dept. There is a booklet on the subject. There is even an International Treaty between the USA & UK covering this subject. I will try to find the booklet #.
Reg. Frank R.
Ps. Jo Brayne:
My apologies, to you I was not suggesting you are stupid. I was rather harshly suggesting, the buyer should never pay the seller closing costs. Unless you are getting a cheap deal, "As is".
I shall put my arrogant attitude down to living in NYC for to long. Still off to the old country in 2 weeks, for refresher course in manners. Lets stay calm Lady's & gentlemen & try as Brits to help one & another.
"New rules enacted in 1997 appear to place nonresident aliens on the same footing as resident aliens and citizens with respect to the disposition of a principal residence. In general, up to $250,000 ($500,000 for taxpayers who are married and file joint returns) of gain from the sale of a principal residence can be entirely excluded from income, provided that the home in question has been owned and used as a principal residence for at least two of the five years preceding the sale. "
I would like to know the booklet number you are referring to please.
Thanks, Sam.
Jan 31st 2003, 1:55 am
#17
Just Joined
Thread Starter
Joined: Oct 2002
Posts: 18
Conclusion
All
As the creator of the orginal message in this thread I have been watching the discussion move on from it's original question. It's been very interesting and I thank you all for your input.
However..I would like to just make sure I am clear on the conclusion to the original question. Which was "should I purhase a house in the USA for 18month-2 years or should I invest my money else where....
I think the conclusion was to invest else where given the short duration of the investment. However I am not sure where was the best place to invest.....
The only other point my partner raised was that rent in the MA is far higher than the UK. So if we purchased a house moved back in 2 years and rented the house we would still be in a good position...
Any way..your conclusions on this topic are welcome
Matthew
As the creator of the orginal message in this thread I have been watching the discussion move on from it's original question. It's been very interesting and I thank you all for your input.
However..I would like to just make sure I am clear on the conclusion to the original question. Which was "should I purhase a house in the USA for 18month-2 years or should I invest my money else where....
I think the conclusion was to invest else where given the short duration of the investment. However I am not sure where was the best place to invest.....
The only other point my partner raised was that rent in the MA is far higher than the UK. So if we purchased a house moved back in 2 years and rented the house we would still be in a good position...
Any way..your conclusions on this topic are welcome
Matthew
Jan 31st 2003, 2:03 am
#18
BE Forum Addict
Joined: Dec 2002
Location: Ft Lauderdale, FL
Posts: 4,792
I am still looking for the booklet on the treaty, between USA & UK.
The problem is, IRS says your USA home is your prime residence. You are living there, paying taxes, driving license etc etc. Therefore the UK property becomes your secondary/holiday home. I know several people who have had problems.
I am a bit busy at the moment, but will look ASAP. I am sure you will be able to find it online. It's tax treaty rules between USA & UK.
The trouble is, some people assume, the owned property must be the primary & the rental is the secondary. Nice idea. But not so. Its the one you reside in, which is primary.
Speak to your accountant/lawyer.
reg. Frank R.
The problem is, IRS says your USA home is your prime residence. You are living there, paying taxes, driving license etc etc. Therefore the UK property becomes your secondary/holiday home. I know several people who have had problems.
I am a bit busy at the moment, but will look ASAP. I am sure you will be able to find it online. It's tax treaty rules between USA & UK.
The trouble is, some people assume, the owned property must be the primary & the rental is the secondary. Nice idea. But not so. Its the one you reside in, which is primary.
Speak to your accountant/lawyer.
reg. Frank R.
