| “[1] What is the best way to sell my UK property and bring money to the US from a tax standpoint?”--->Do you have a primary residence in US besides the one in UK??? As yo can see, yu can only have one primary residence at any given time, though they may share the residence with other people. A primary residence is considered as a legal residence for the purpose of income tax and/or acquiring a mortgage.I assume that your pty in UK is your primary residence, then you still have some capital gains, NOT the whole o f $250,000 as single (your US spouse can’t qualify for the credit on home in UK as she didn’t live in home at that time) that don't seem to fall under the exclusion. Even if you haven't lived in your home a total of two years out of the last five, you're still eligible for a partial exclusion of capital gains if you sold because of a change in your employment from UK to US, or other reasond; because your doctor recommended the move for your health, or due to other unforeseen circumstances such as a death in the family, a divorce, or multiple births or etc. For example, if an you, as single , lives in your home for 12 months, and then sells it for a $100,000 profit due to an unforeseen circumstance, for a job in US to move to US from UK or etc, then entire amount could be excluded. Because she lived in the house for half of the two-year period, you could claim half of the exclusion, or $125,000. (12/24 x $250,000 = $125,000.) That covers your entire $100,000 gain.
“[2] I plan to live in the US for the indefinite future. Should I become a US citizen or not? What are the benefits in terms of tax?”---->Then I guess you need to be either a US resident alien(G/R holder) or a US citizen; you are subject to US taxes on your US source and world wide income; however, you can also claim tax credits/deductions.
“[3] Both me and my wife working, but are both claiming single. Should we switch it to joint (total income > $100k)”---->You mean MFS???? Your filing status is determined in large part by whether you were considered married at the end of the year.You can switch MFS status to MFJ. As a married couple, you can NEVER file your returns as single; You can not file as single. You can file as married filing separately. Your filing status acts as a sort of switch. Filing status determines which tax rates and which standard deduction amounts apply to a specific tax return. You are married, and you are filing a joint return with your spouse. You are considered married if you are legally married on the last day of the year. In order to file jointly, both you and your spouse must agree to file a joint tax return, and both must sign the return. Married Filing Jointly provides more tax benefits than filing a separate return. You are married, and you and your spouse are filing separate tax returns. Married filing separately taxpayers have the least beneficial tax treatment UNLESS one spouse has much higher taxable income that the other spouse. But MFS status is the one way to achieve separate tax liabilities, which is a benefit not to be overlooked. You should carefully consider whether filing joint or separate returns will be most beneficial for their unique financial situation. MFS taxpayers are not eligible to claim the following tax benefits: tuition and fees deduction ;student loan interest deduction ;tax-free exclusion of US bond interest or etc.
“[4] I assume it is easy for the US government to find my bank accounts in the UK if I don't declare them - and as they all earn interest - I guess I will need to. Any advantages of keeping less than $10k in each of my UK accounts?”----> You, as a US person who has a financial interest in or signature authority or other authority over any financial account in UK, if the aggregate value of these accounts exceeds $10,000 at any time during the calendar year, MUST file IRS form TD F 90-22.1 by June 30 of the year following the year that the account holder meets the $10,000 threshold.
“Any advantages of keeping less than $10k in each of my UK accounts?”---->Not sure; however, you still need to report your interest icnoem that you eanr in UK on your US return. As long as you pay UK tax(es) on the interest income, you can claim your foreign tax credit on your US return by fling form 1116 on1040 line 47 or on Sch A line 8.
“[5] Are there any tax implications of transferring money from my UK to US accounts?”---->It depends; US person forming a trust in another country, transferring money to a foreign trust, or who receives money from a foreign trust need to file IRS Form 3520 as long as the amount exceeds $100,000. This is an informational return, not a tax return because these events aren't taxed; if you receive a gift (more than $100,000) from UK, then you need to file your IRS info return , Form 3520 just to report it to the IRS(you , as a one of the gift) do NOT pay any tax on the gift exceeding $100,000 in US.SO, Ifyou, as a US person,, receives a foreign gift or foreign inheritance that exceeds $100,000 in one year, then you must report the receipt of that gift or inheritance by filing Form 3520 with the IRS. The penalties for a failure to file this form include (1) 35% of the gross value of the distributions received from a foreign trust or transferred to a foreign trust, and (2) 5% per month for the amount of certain foreign gifts to a maximum of 25%.
“[6] How does the UK / US dual tax treaty affect my UK investment and UK property rental income? If I pay UK taxes on them both.”---->As long as you married to US person, you are actually treated as a US person for both tax purposes and INS rule.As a US person, you need to report all of your UK income on US return(s);you can also claim any foreign tax credit that you paid to UK on your US federal/state return by filing form 1116; you are also subject to foreign earned income exclusion as long as live/work in US, as a US person , for more than 3330 days.
 |
Linear Mode
