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Old 04-25-2011, 11:59 AM
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US greencard holder and foreign capital gains tax liabilities

hi,

i have owned a UK house since 2003, not lived in it since 2005, and been a US Greencard holder since 2009. I am considering selling the house and questioning the amount of CGT i would incur both in UK and US. I currently offset mortgage interest/costs etc in US tax return. House mortgage is 375K. Selling price is 775K. With estimated 3% in selling costs. thanks.



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Old 04-25-2011, 01:00 PM
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“ I am considering selling the house and questioning the amount of CGT i would incur both in UK and US. I currently offset mortgage interest/costs etc in US tax return. House mortgage is 375K. Selling price is 775K. With estimated 3% in selling costs. thanks.”---> As you can see, you are NOT subject to double taxation in US and UK. As a US resident, a green card holder, UNDER the US INS Rules, you are liable for US taxes, both federal and state( if your state imposes income tax on its residents; there are 9 states that do not impose income taxes on their residents in US). And on taxes that you paid to UK taxing authorities, you can claim foreign tax credit on your US federal return but NOT on your state return.I guess if you pay LTCG tax on the sale of your primary residence in UK to UK, then you can claim your UK LTCG tax on your US federal return, NOT on your state return in US. As long as your home in UK is your primary residence, then when you sell your primary residence, you can make up to $250,000 in profit if you're a single owner, twice that if you're married, and not owe any capital gains taxes, LTCG tax I mean; primary residence means a home that you personally live in the majority of the year. The ownership requirements of a house requires you to live in a house as your own for five years before selling or owning the house for a minimum for two years.



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