@jyee315 wrote:
I think I am not fully understanding this, let me try to elaborate. Assume my wife owns the property now, and this year will sell it.
In your original question you said "She is likely going to inherit her parent's house." "Inherit" has a specific legal meaning, a transfer of ownership from a deceased person to an heir. If she is going to (which implies in the future) inherit the house, then she does not own it now. She will own it after she inherits it. But now you say "Assume my wife owns the property now." If she already owns it, she is not going to inherit it. You have to make sure that you have a clear understanding of who owns the house and who is selling it, and you have to be very clear about that when you talk to the tax professional. If there is any confusion or doubt about who actually owns the house, you might have to consult a Canadian real estate attorney.
@jyee315 wrote:
But are you suggesting that since I have treated her as a resident alien for prior tax purposes, that she is obligated to file US taxes moving forward, even if we are filing separately indefinitely?
Yes, that is exactly what I'm saying. You really need to read "Nonresident Spouse Treated as a Resident" in Publication 519, which I referenced in my previous post. To quote a short part of one sentence from that section, "Once made, the choice to be treated as a resident applies to all later years" unless it is suspended or ended as described in the publication. So yes, she is treated as a resident indefinitely, and a resident alien is required to file a U.S. tax return the same as a citizen, and report her worldwide income, not just U.S. income. A tax professional who is familiar with the rules for aliens will be able to explain this further.
