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Resident Alien - Married couple - one is US citizen and the…

Resident Alien -Married couple -...
Resident Alien -Married couple - one is US citizen and the other is Canadian but is US resident alien.If couple purchases a house as their primary resident, is there any tax implication outside of the normal tax rules of selling your primary resident that will apply?If it was a rental property, is there any additional tax that would come into play because of his US status?Thanks,
JW
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Answered in 8 minutes by:
12/1/2017
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 31,349
Experience: Taxes, Immigration, Labor Relations
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As both spouses are US persons for tax purposes - the fact of being a Canadian will not be relevant for US income tax purposes.

So whatever you referred as "the normal tax rules" will apply.

If that is NOT a primary residence - the gain - if any will be taxable - and if the property will be held at least one year - the gain will be taxed at reduced rates as long term capital gain.

That will be true regardless if the property will be rented or used as a second home.

I assume that they will not move to Canada and the spouse's status will not changed to "nonresident alien"

Please also be aware that a new tax law is discussed and the proposition is to increase time required for the property to exclude the gain - from 2-out-of-5" to "5-out-of-8" - we still yet to see if that will be approved.

Lev
Lev, Tax Advisor
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Customer reply replied 2 months ago
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