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Tax Law (Questions About Taxes)/Principal Residence Capital Gain - Tax Liability

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Question
Thank you for taking my question!

I bought my primary residence in Virginia in 2005, while on H1B visa with green card application in process.  In 2011 owing to failure of my green card application I moved to Canada as a citizen of the country. (I also own two rental properties in Virginia).

My wife and our son (born in Virginia in 2006) continue to live in our house. She has been employed on HIB visa with green card under process I had my wife’s name added as joint owner of the house in 2012.

Since I became resident in Canada in 2011, I have been filing NR1040 returns for income in the US besides my Canadian T1 General tax return in Canada. My wife has been filing her 1040 and Virginia tax return since 2003.

We are planning to sell the house I would like your advice about our eligibility of $250,000 capital gain exemption and if there is any tax liability on capital gain on sale of our primary residence. Can my wife claim the capital gain exemption in her tax return instead of me?

Answer
Ryan,

Thanks for your question.

She can exclude up to $250,000 of gain on her share of he house, since it qualifies as her primary residence. You must report and pay tax on your share of he gain, as you are an owner but do not qualify for the exclusion.

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA

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I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

Experience

I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

Organizations
FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

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The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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