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I've owned my condo less than 2 years. Now, my husband and I are
expecting a child and need to move into a bigger residence. Does the birth of a child
qualify for an exemption from paying capital gains tax on a property I have owned for less
than two years?
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 Apparently not. IRS defines unforeseeable circumstances as multiple
births from the same pregnancy.
A portion of the exclusion is available for those who lived in their residence for less
than 24 months, but had to sell the residence for health or job-related reasons or other
unforeseeable circumstances, including: death; becoming eligible for unemployment
compensation; a change in employment that leaves the taxpayer unable to pay the mortgage
or reasonable basic living expenses; multiple births resulting from the same pregnancy;
damage to the residence resulting from a natural or man-made disaster, or an act of war or
terrorism; and condemnation, seizure, or other involuntary conversion of the property.
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I am a United Kingdom resident and citizen. I
just sold a vacation home located in the U.S. and made a $30,000 profit. Do I have to pay
tax on this profit?
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Yes. You owe capital gains taxes on the profit. Under U.S. law, the
buyer or the escrow agent was supposed to withhold taxes equal to 10% of the sales price,
and pay the taxes to the Treasury. You are then entitled to file a tax return (Form 1040
NR) to claim any refund due you because of the withholding.
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We purchased a real
estate investment property in Australia. How do we declare the rental income earned
abroad?
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If you are U.S. taxpayers, you treat the rental as though it were located in the
U.S., except you may be entitled to a foreign tax credit for a portion of any taxes paid
to Australia. You'll probably have to complete an Australian tax return as well.
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Is a stock option taxable in the state of residence
when it was granted or in the state of residence where it was finally exercised?
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If an
employee stock option vests while the taxpayer is a resident of California, the exercise
of the option will be taxable in California, either as compensation income or an AMT
preference (if the option was an Incentive Stock Option). Once the option is exercised,
the later sale of the actual stock will be taxed in the state of residence at the time of
sale. Thus, if you early exercise your options while a California resident and pay little
or no tax on the transaction, then legitimately move to Nevada and sell your stock, there
should be no state tax on the sale of the stock.
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Partial Residence Exclusion
