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paying capital gains on UK house sale

paying capital gains on UK house sale

Old Feb 12th 2005, 4:06 pm
  #1  
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Default paying capital gains on UK house sale

I've done some research and asked someone else. But, not sure of the answer and hoping someone already knows. Last year when we moved to the US we came over with funds from the sale of our house in the UK (both my husband and I owned the house) Now the question is, over here you're allowed a very considerable amount of money to keep on the sale of your house....I'm assuming without reporting that money to the IRS. However, is it the same for your primary residence that you've sold in the UK? I'm leaning toward the theory that it is. Read somewhere on here (yes I did search and found nothing on BE) that the US won't tax twice...meaning we already were taxed on the sale of our home in the UK. So, does anyone know if we have to claim the money we brought into the US last year from the sale of our house in the UK? Do we have to claim it as unearned income? Also, we made no money (no interest from bank account, or investments) on that money.
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Old Feb 12th 2005, 7:01 pm
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Default Re: paying capital gains on UK house sale

Were you resident in the US at the tiime of the sale, sounds like you were not.
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Old Feb 12th 2005, 7:48 pm
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Default Re: paying capital gains on UK house sale

Originally Posted by Boiler
Were you resident in the US at the tiime of the sale, sounds like you were not.
No, the house was sold before we moved.
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Old Feb 12th 2005, 8:11 pm
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Default Re: paying capital gains on UK house sale

If you file as a non-resident for that tax year, you are not taxed on any foreign-source income. If you file as a resident, I'm not sure what the answer would be.
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Old Feb 12th 2005, 8:29 pm
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Default Re: paying capital gains on UK house sale

Originally Posted by AdobePinon
If you file as a non-resident for that tax year, you are not taxed on any foreign-source income. If you file as a resident, I'm not sure what the answer would be.
I think I've figured out that its capital gains....and we filed as residents because we've been here since January '04. The question is whether they consider a foreign house sale as capital gains....from what I've read they should. Probably should call IRS.
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Old Feb 12th 2005, 9:16 pm
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Default Re: paying capital gains on UK house sale

Originally Posted by AmerLisa
I think I've figured out that its capital gains....and we filed as residents because we've been here since January '04. The question is whether they consider a foreign house sale as capital gains....from what I've read they should. Probably should call IRS.
We did the same with our house, but since it was our primary residence and less than $250K we didn't list it in our tax return.

Check the tax instructions.
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Old Feb 12th 2005, 9:25 pm
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Default Re: paying capital gains on UK house sale

Originally Posted by ukemigrant
We did the same with our house, but since it was our primary residence and less than $250K we didn't list it in our tax return.

Check the tax instructions.
This is what we thought. But, I was curious as to whether anyone else had done this or not. Thanks for the information.
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Old Feb 13th 2005, 12:06 am
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Default Re: paying capital gains on UK house sale

Originally Posted by AmerLisa
I've done some research and asked someone else. But, not sure of the answer and hoping someone already knows. Last year when we moved to the US we came over with funds from the sale of our house in the UK (both my husband and I owned the house) Now the question is, over here you're allowed a very considerable amount of money to keep on the sale of your house....I'm assuming without reporting that money to the IRS. However, is it the same for your primary residence that you've sold in the UK? I'm leaning toward the theory that it is. Read somewhere on here (yes I did search and found nothing on BE) that the US won't tax twice...meaning we already were taxed on the sale of our home in the UK. So, does anyone know if we have to claim the money we brought into the US last year from the sale of our house in the UK? Do we have to claim it as unearned income? Also, we made no money (no interest from bank account, or investments) on that money.
It's a simple situation, and I've just gone through it in this tax return.

If it was your primary residence, you lived in it for more than two years, and made less than $250k profit on the sale, then it need not be reported on your tax return. Over $250k it is subject to capital gains tax. If you lived there less than two years, the proceeds of the sale are pro-rated by the amount of time you lived there.

Hope this helps!
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Old Feb 13th 2005, 1:15 am
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Default Re: paying capital gains on UK house sale

Originally Posted by dbj1000

Hope this helps!
Tremendously!! Thanks for that information.
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Old Feb 13th 2005, 1:25 am
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Default Re: paying capital gains on UK house sale

Originally Posted by AmerLisa
Tremendously!! Thanks for that information.
Feel free to drown me in Karma then. Or not...

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Old Feb 13th 2005, 1:42 am
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Default Re: paying capital gains on UK house sale

Originally Posted by dbj1000
Feel free to drown me in Karma then. Or not...

I've just tried and I can't....but you and a couple of others will be first on my list.
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Old Feb 13th 2005, 4:15 am
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Default Re: paying capital gains on UK house sale

Originally Posted by AmerLisa
I've just tried and I can't....but you and a couple of others will be first on my list.

also, the figure of 250,000 USD is not correct in your case

its actually 500,000k total for both you and your hubby

its 250k per person
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Old Feb 13th 2005, 4:46 am
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Default Re: paying capital gains on UK house sale

Originally Posted by BritGuyTN
also, the figure of 250,000 USD is not correct in your case

its actually 500,000k total for both you and your hubby

its 250k per person
That's right! Remember that, next time you make more than $250k when you sell your house
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Old Feb 13th 2005, 5:33 am
  #14  
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Default Re: paying capital gains on UK house sale

Originally Posted by dbj1000
It's a simple situation, and I've just gone through it in this tax return.

If it was your primary residence, you lived in it for more than two years, and made less than $250k profit on the sale, then it need not be reported on your tax return. Over $250k it is subject to capital gains tax. If you lived there less than two years, the proceeds of the sale are pro-rated by the amount of time you lived there.

Hope this helps!

Will she need to fill out any additional forms for this? Or can she just ignore it if she is exempt?
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Old Feb 13th 2005, 3:14 pm
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Default Re: paying capital gains on UK house sale

Originally Posted by fatbrit
Will she need to fill out any additional forms for this? Or can she just ignore it if she is exempt?
According to the IRS website FAQ the income from the sale need not be reported unless the conditions I listed (owned and lived in it for more than 2 years, and made less than $250k/$500k on the sale) are not met. The CPA who did my tax return this year didn't list my UK home sale income anywhere.

However do remember that you can exclude UK property tax (Council Tax) from your US tax. Also, I was able to exclude a huge early-redemption penalty on my UK mortgage, since that is treaded as a one-time advance interest payment if it is not for a particular service from the mortgage company.
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