Forced Residence Sale Foreign Residence Sale Foreign Rental Property Stock Trades by Non-U.S. Taxpayers Sale by Executor[an error occurred while processing this directive][an error occurred while processing this directive] [an error occurred while processing this directive] I've owned my principal residence for less than 2 years but am forced to sell because of separation. is there an exemption as far as taxes are concerned for the gain on the sale. [an error occurred while processing this directive] Legal separation or divorce qualifies as an unforeseen circumstance that will permit a pro-rata use of the principal residency exemption. For instance, if you are forced to sell your home after 12 months, then your exclusion is $125,000 (50% of the $250,000 exclusion). Other unforeseen circumstances include: 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. [an error occurred while processing this directive] Tax Class on Residence Sales [an error occurred while processing this directive][an error occurred while processing this directive][an error occurred while processing this directive] [an error occurred while processing this directive] I have lived in the US for 10 years, 4 years as a resident alien. I want to sell my residence in the U.K. Will I owe U.S. taxes on the gain? [an error occurred while processing this directive] You may owe both UK and U.S. taxes on the sale. For U.S. tax purposes, if you qualify for the residence exclusion, you should not pay taxes on the gain (except on the amount your gain exceeds the exclusion). Unless you owned and lived in your UK residence as your principal residence for 24 of the 50 months prior to sale, you will not qualify for the residence exclusion and the entire gain will be taxable on your U.S. tax return; however, you may be entitled to a foreign tax credit for a portion of any taxes paid to the U.K. on the sale. [an error occurred while processing this directive] Tax Prophet's tax class on Residence Sales [an error occurred while processing this directive][an error occurred while processing this directive][an error occurred while processing this directive] [an error occurred while processing this directive] I am taxed as a US citizen and have rental property in Australia. How do I calculate my mortgage interest and other expenses paid in Australian dollars for deduction on my US tax returns? [an error occurred while processing this directive] Figure out your taxes on the Australian property as though it were U.S. property (Form 1040, Schedule E) and then convert the Australian currency to U.S. dollars, using the average foreign exchange rate for the year in question. [an error occurred while processing this directive] Tax Prophet's tax class on Real Estate [an error occurred while processing this directive] [an error occurred while processing this directive] [an error occurred while processing this directive] [an error occurred while processing this directive] Currently, I am trading options on the US market. Regarding the capital gains, will I be taxed since I am a foreign investor trading on the internet? Will I be subject to double taxation from both the US and my country of residence, Singapore? [an error occurred while processing this directive] Gain and profits will not be taxed to you, unless you are considered to be engaged in a trade or business in the U.S.; Income is taxed to you at a flat 30% rate or a lower treaty rate, if applicable. If you are subject to U.S. taxes on your income portion of earnings, then you should receive a foreign tax credit for some or all of the taxes paid to the U.S. on your Singapore return. There should not be double taxation. [an error occurred while processing this directive] Tax Prophet's section on Foreign Taxation [an error occurred while processing this directive] [an error occurred while processing this directive] [an error occurred while processing this directive] [an error occurred while processing this directive] A US taxpayer ("A") is considering leaving her property to UK resident relatives. Upon A's death, may her executor sell her property and distribute it tax-free to foreign beneficiaries? Assume A's estate is less than $1,000,000. [an error occurred while processing this directive] The general answer to your question is that estates that fall under the estate tax exemption equivalent ($1,000,000 in 2003) are not taxed, regardless of the nationality of the beneficiary. Assets are stepped up to the fair market value, so a subsequent sale for the same amount as the date of death valuation will not produce a capital gain. Any increase in the asset's value from the date of death will produce a capital gain, as to the increased amount only. [an error occurred while processing this directive] Tax Prophet's section on Estate Planning [an error occurred while processing this directive] [an error occurred while processing this directive] [an error occurred while processing this directive]