Effect of 401K contribution & Canada rental income on MA

[Livonian]

I was playing with approximate numbers in Turbo tax today to get an idea of refund. Found no first time home buyer credit. Here are my approx data. Married filing jointly & meet SPT

1) Gross income in US- 165,000
2) 401K contribution- 15,000
3) Ontario rental income- Net with depreciation- Negative
4) Spousal income while in Canada for part year- 20,000

Does not 401K reduce MAGI?
Does not 2555 exclude foreign income earned?

Is there a way to bring down MAGI to get partial home buyer credit?

[nelsona]

Your 401(k) contributions will be reflected in a reduction in your total wage ammount.

Your foreign exclusion doesn't reduce gross income.

Moving expenses? Not much else.

[nelsona]

Remember that to be eligible for home buyer credit (which seems to be at the root of all these Q's) ownership of any Cdn home in that past ekigibility period disqulaifies you.

[Livonian]

Well, IRS website FAQ confirms eligibility for first time home buyers credit even if you owned principal residence outside US within last 3 years.

The Q/A are not numbered but please take a look at seventh from bottom from the link below.

http://www.irs.gov/newsroom/article/0,, ... 91,00.html

In a way, it makes sense to allow credit because the intent is to encourage home sales in US to help economy.

[nelsona]

Good info, thanks.