Tax implications of real estate expenses when moving to USA

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alex_sauvage
Posts: 2
Joined: Fri Sep 12, 2014 11:37 am

Tax implications of real estate expenses when moving to USA

Post by alex_sauvage »

I have posted this question previously in "Immigration"forum, but got no reply. Maybe this is a better place for it:
I got a job offer from the company in USA and will be moving there on TN visa on the middle of December. I am looking to sell the house in Canada and buy another one in USA. While the company is paying for the actual move they don't cover real estate expenses, like commissions for the sale of the house and closing cost for the new one. I believe normally those would be tax-deductible under normal circumstances, but I am wondering if moving from one country to another will affect it. I assume I can only deduct the cost from my income in USA, but since I am moving in December I won't have enough income to offset it. Can I claim those deduction in the next year when I have significantly more income? And if actual closing date for the sale and purchase date will be in the next year, will that make it applicable to the next tax year? Just trying to plan things to minimize losses.
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
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Post by nelsona »

As you suspected, the moving expenses are only deductible on your US tax return,against subsequent employment income. If you cannot use them all in the year of the move they can be carried forward to the next year.

You should take a look at IRS Pub 521. You will see that none of the expenses related to the selling or purchase of your home(s) are tax deductible, so you are incorrect on that point. You really only get to deduct moving and storage costs, and the cost of one trip. Anything else that the firm reimburses you becomes taxable income and any other expenses than these that they do not reimburse are simply non-deductible.

That is why it is important to negociate as much reimbursement from your employer, even though it is taxable, since there is no break otherwise. It sounds like your firm is only covering the bare minimum.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
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