What are the tax implications if someone wants to sell a house they own in the UK and moves to the US?

By
Bruno Bianchi
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Question

Husband is a UK national. Wife is a UA citizen. They own a house in the UK and they want to sell it and move to the US . Do they have to pay tax in the US? What are the tax implications?

Answers

These are the answers of some Facebook group members:

“Capital Gains exemption of up to $250,000 for the US spouse.”

“This is my take on the rule. the Capital Gains exemption is up to $250,000 USD if you make $300,000 USD Profit there a US citizen will be claiming $150,000 under exemption, i’m hoping others will comment to back my theory”

“You will know based on the way you purchased the house together in the UK. If you are joint tenants then it’s assumed 50/50. If you are tenants in common then it’s whatever % you put on the Trust Deed when you purchased the house. The IRS will only know what you tell them.”

“Assuming they own the house in the UK as 50/50 shares, once the house is sold, take any capital gains and she is liable for 50% of them. If that 50% is over $250,000 then yes, she’d owe capital gains in the US. If the husband is not yet a US person then he doesn’t owe anything on his share. If he is a US person then things change.”

“.. if the title of between spouses the property is not clear you may wish to ask a solicitor for advice. In addition to any gain on the sale of the property, the substantial fall in the value of the pound will inevitably lead to a US taxable foreign currency mortgage gain on redeeming the mortgage.”

“Quijano v. U.S. https://caselaw.findlaw.com/us-1st-circuit/1121323.html — Time the obtaining of a green card accordingly. It matters who is on title, whether there is a trust of land, and in what proportion beneficial ownership falls. Currency gains are generally ordinary income https://www.law.cornell.edu/uscode/text/26/988 and losses nondeductible unless they are business losses: sometimes the issue can be finessed by renting out a property before selling. Get professional help.”

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