Tax implications - selling a house on H1b or EAD

[EkAurAaya]

What are (if any) the tax implications > if a H1b or EAD holder sells his/her house?

From what i knew there were no special "taxes" or implications... but someone (a lawyer) recently told me in addition to everything else there is a 10% tax (federal) on selling price?

Can anyone who has sold a property on h1 or EAD confirm this?

Please share first hand experience and not something that someones heard through the grapevine

[EkAurAaya]

no ones ever sold a house on H1B or EAD? :confused:

[kevin08]

Once you are 183 days on H1b (significant presence test), you become resident alien for federal tax purposes and file 1040 just like any other resident. From my experience in real estate, I am yet to encounter an IRS form that says H1b's shall be taxed 10% more. Can you request the IRS publication number from the source? I am curious.

[snathan]

What are (if any) the tax implications > if a H1b or EAD holder sells his/her house?

From what i knew there were no special "taxes" or implications... but someone (a lawyer) recently told me in addition to everything else there is a 10% tax (federal) on selling price?

Can anyone who has sold a property on h1 or EAD confirm this?

Please share first hand experience and not something that someones heard through the grapevine

I think you need to talk to the CPA for tax and not lawyer....

[EkAurAaya]

Once you are 183 days on H1b (significant presence test), you become resident alien for federal tax purposes and file 1040 just like any other resident. From my experience in real estate, I am yet to encounter an IRS form that says H1b's shall be taxed 10% more. Can you request the IRS publication number from the source? I am curious.

Thanks for your response. My understanding was the same as yours, however this came from my real estate lawyer (a good one). May be he misunderstood resident alien v/s foreigner investing here.

I still would like to hear from someone who actually sold a place on h1 or ead their experience.

[EkAurAaya]

I think you need to talk to the CPA for tax and not lawyer....

This came from a real estate lawyer... usually they know what they are talking about. But you are right, wont be a bad idea to run this by a CPA

[gman]

That's just like any other transactions. There is no sales tax for real este transactions. There maybe long or short term gains depending on how the house was acquired. Once you are filing as a permanent resident for tax reasons, EAD, AP, H1 etc, do not matter. Bottom line you pay taxes on income (whether short term or long term gain and other rule) and it has no bearing on the details of your legal status.

[YesGC_NoGC]

There are no TAX on selling price as long as you stayed in the house for 2 year , you can exclude up to $250,000 ($500,000 for a married couple)

If you meet the two-year ownership and use tests for a principal residence, and don't sell more than one principal residence in any two-year period, you can exclude any capital gain tax on the sale - up to the $250,000 or $500,000


When you close your sale, your real state lawer will pay to your bank, your real estate agent, your reality transfer fee and other misc fee like Attorney fee etc.

I have sold 2 houses in last 7 years and no real estate lawyer ever asked for 10% tax!!!


More over are you making any money on the property sale now a days?!



FED allows

What are (if any) the tax implications > if a H1b or EAD holder sells his/her house?

From what i knew there were no special "taxes" or implications... but someone (a lawyer) recently told me in addition to everything else there is a 10% tax (federal) on selling price?

Can anyone who has sold a property on h1 or EAD confirm this?

Please share first hand experience and not something that someones heard through the grapevine

[EkAurAaya]

There are no TAX on selling price as long as you stayed in the house for 2 year , you can exclude up to $250,000 ($500,000 for a married couple)

If you meet the two-year ownership and use tests for a principal residence, and don't sell more than one principal residence in any two-year period, you can exclude any capital gain tax on the sale - up to the $250,000 or $500,000


When you close your sale, your real state lawer will pay to your bank, your real estate agent, your reality transfer fee and other misc fee like Attorney fee etc.

I have sold 2 houses in last 7 years and no real estate lawyer ever asked for 10% tax!!!


More over are you making any money on the property sale now a days?!



FED allows

Thanks for confirming! No i m not looking to sell in this market :D (although if i have to sell i will still break even) i have a rental property that i was thinking of selling early last year and the lawyer mentioned this to me... so i wanted to confirm!

[induk]

if you are foreign national selling a house, 10 % of your sale price may be held in escrow account till you pay the taxes. This is the case in atleast some states. This is what your real estate lawyer might be referring to. The rest 10 % is released after you have shown proof that you have paid your taxes.

[vpa_2009]

I sold the house on H1 and there was nothing addition for H1 holder. It is just that if you have that property for less than 2 years then you pay tax.

Just thinking if the new law for GC approved like buy a house and get
GC then what will happen for those like us who have house since 2004 and sold one and bought another in that time period.
I am on EAD now. PD -Nov 2003

[solaris27]

no diffrence in selling a house on H1b or EAD

[EkAurAaya]

if you are foreign national selling a house, 10 % of your sale price may be held in escrow account till you pay the taxes. This is the case in atleast some states. This is what your real estate lawyer might be referring to. The rest 10 % is released after you have shown proof that you have paid your taxes.

Thanks for your response... do you know what states by any chance?

[EkAurAaya]

I sold the house on H1 and there was nothing addition for H1 holder. It is just that if you have that property for less than 2 years then you pay tax.

Just thinking if the new law for GC approved like buy a house and get
GC then what will happen for those like us who have house since 2004 and sold one and bought another in that time period.
I am on EAD now. PD -Nov 2003

Can you please share what state? Thanks

[EkAurAaya]

if you are foreign national selling a house, 10 % of your sale price may be held in escrow account till you pay the taxes. This is the case in atleast some states. This is what your real estate lawyer might be referring to. The rest 10 % is released after you have shown proof that you have paid your taxes.

Thanks you pointed me in the right direction... very interesting its called FIRPTA

http://www.irs.gov/businesses/small/international/article/0,,id=105000,00.html

Anyone investing in Real estate should read this