Selling a brand new constructed house after relocation Hi,
I kindly ask for your advice on this interesting case, where I already got 2 contradicting views from 2 different tax experts I consulted with.
Here are the details:
- I am not an American Citizen.
- During 2012 I relocated from my country to live and work in Massachusetts USA.
- The relocation was done via my employer, and now I am working in the US office of the company (Intra-company transfer).
- Last month I received a green card, i.e. I am a permanent resident now.
- During 2010, way before I knew about the relocation, I started constructing a house in my country.
- The construction will be completed this month (June 2013), therefore I never lived in the house.
- As I now live in the USA, I wish to sell the house.
- The ask price will produce a profit of about $100,000 from the cost of construction.
My question is:
Do I need to pay tax to the American IRS on selling the house?
One tax expert says that yes, as this is a capital gain and I am a US resident.
The other expert says this is not a standard case of an American citizen investing in real estate and making a profit. He looks at the relocation circumstances.
Independently, I found IRS "Publication 523, Selling Your Home" on the net, that talks about "Excluding the Gain".
However one of the tests (conditions) there for full exclusion, is to live in the house for at least 2 years in the past 5. I could not find guidance for a case where the house was under construction.
I will appreciate any advice and guidance on this case.
Thank you in advance,
Tom. |