Us citizen selling selling their home with CDN spouse

[MIKE2000Z28]

I know there is a 250k usd exemption, the question is do I divide the capital gain by 50 percent since I own half the house? So I make 300k, do you report 150k?

Thanks,

[nelsona]

Yes, you report half the gain, which means you should be tax fee, and may not even have to report the sale.

[ND]

"and may not even have to report the sale', if Cdn house and/or otherwise no 1099-S issued, don't report, if 1099-s issued, report.

[nelsona]

The importance of the phrase "MAY not have to report" seems to have been overlooked.

I wonder what Canadian entity would issue a 1099-S for a sale of a Canadian house by two Canadian residents?

[ND]

nowhere in poster's question does it state that the sold property was located in Canada and not in the US

[nelsona]

Mike, a long-time poster, lives in QC.

[nelsona]

And a US citizen living in US "selling their home", would not care about the citizenship of the spouse, since they would both be US tax residents.

[ND]

But Cdn spouses and current residents selling a US property, whose 2/5 yes residency qualified it as principle residence, would.

[ND]

The importance of the phrase "MAY not have to report" seems to have been overlooked. These were your words, not mine. There's no overlooking when clarifying when and when not an excluded sale would be reported on 1040.

[nelsona]

They live in Canada. They will not be issued a 1099-S.

[nelsona]

He has alreay stated he qualifies for exemption. Done,

[ND]

So, you're saying that in your original reply 'Yes, you report half the gain, which means you should be tax fee, and may not even have to report the sale', you should only have stated 'Yes, you report half the gain, which means you should be tax fee'

[nelsona]

Agreed. You made the distinction between reporting and paying tax in your reply. So did I.

[MIKE2000Z28]

Just an update to this situation. If I go over the 250k usd exemption is there a way to transfer my 50 percent to my wife without incurring a tax hit? I see the IRS gift tax is 185k for the year 2024 for non usa spouses indexed, but that would technically include the 250k usd exemption plus the 185k or whatever it is in year i would transfer? Since im thinking the transfer for US tax purposes would be a selling event plus adding in the gift tax for non us spouse would cover 435k usd as a total exemption.

I don't mind paying thousands to get it right if it saves me tens of thousands in the end.

[sara34]

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