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Posted by A.G. Kalman on January 3, 2007, 10:49 pm
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ysmrysmr@gmail.com wrote:
> Up to 2006, my wife and I were residents in US tax-wise and
> filed/have to file 1040 jointly. We will be permanently
> going back to my country in Feb 2007 and will not come back
> to US as residents. We are not US citizens nor green card
> holders. We are now selling our primary residence where we
> lived for about 20 years. We will have capital gains which
> will be less than $500,000. We guess our tax status for
> 2007 will be non-resident aliens. I hope that we do not owe
> any tax on this capital gain just like US citizens do not.
> And, I hope that we do not have to file any thing such as
> 1040NR for 2007 if we do not have any us source income in
> 2007. It is appreciated if anyone can confirm these points.
Any gain or loss on real property in the US, is treated as
gain or loss effectively connected to a trade or business in
the US. As such you are eligible to avail yourselves of the
tax benefit that allows exclusion of gain on the sale of
your main home.
That said, the problem you are probably going to run into,
is that you are nonresident aliens in 2007 and as such,
there is mandatory tax withholding by the buyer on any real
property purchased from a nonresident alien. You would have
to file a 2007 Form 1040NR with Schedule D in order to
request a refund of any withheld tax.
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