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turb0tax_newbie
Level 1

Is 'residency starting date' the date a foreign spouse's (rental) income becomes reportable/taxable?

Hi everyone,

 

Thanks in advance for any advice on this question.

 

I am wondering if the date that my husband arrived in the US (on a CR1 visa) - which is the same date as he obtained his green card - is the same date that his income became reportable and taxable? He did NOT meet the substantial presence test for the year he arrived. My understanding is therefore that his residency started on the date he arrived.

 

Here is what I have found in the IRS guidelines, with the key part in bold, which makes me think this is correct: https://www.irs.gov/individuals/international-taxpayers/residency-starting-and-ending-dates

 

"If you meet the green card test at any time during a calendar year, but do not meet the substantial presence test for that year, your residency starting date is the first day in the calendar year on which you are present in the United States as a lawful permanent resident (the date on which the United States Citizenship and Immigration Services (USCIS) officially approved your petition to become an immigrant)."

 

Similarly, on this page: https://www.irs.gov/individuals/international-taxpayers/taxation-of-dual-status-aliens

 

"For the part of the year you are a U.S. resident alien, you are taxed on income from all sources. Income from sources outside the United States is taxable if you receive it while you are a resident alien."

Income from sources outside the United States that is not effectively connected with a trade or business in the United States is not taxable if you receive it while you are a nonresident alien."

 

So, for example, if he arrived on 1st September, does that mean his income (all foreign) from Jan-August does not need to be reported (and is not taxed) at all? Is anyone able to confirm or deny whether this is correct? If correct, can we file Married Filing Jointly and we simply don't include my husband's income before his residency start date?

 

The reason this is in the landlord section is because the income in question is rental income from our foreign property (which was paid into his individual foreign bank account). I am trying to work out when this rental income became reportable, and also how to determine the 'placed in service' date for depreciation purposes (I'm assuming those two things can be considered to occur on the same date?)

Thanks again for any help!

1 Best answer

Accepted Solutions
pk
Level 12
Level 12

Is 'residency starting date' the date a foreign spouse's (rental) income becomes reportable/taxable?

@turb0tax_newbie  do you still need an answer on this topic ?

 

Generally, world income needs to be reported from the date a person becomes a resident ( Green Card or for tax purposes ).  In your case if your  husband  was not in the USA prior to being admitted  with Green Card, then any foreign income  does not come under the purview of the US tax procedures/rules.

You also used "we" on owning / operating a foreign  rental income property and thus if one of you ( the owners) were in the USA earlier then I think you would need to recognize  this foreign income (depending on the state  there may be community property rules to consider ) on your return -- irrespective of  whether he needs to report this or not.  

If you want a more specific answer . please provide details of the situation --- (a) are you a citizen/Resident and if not when did you enter the USA -- for 2019 ; (b) your husband's citizenship;  (c) in which country is the rental property and what type etc. etc.

View solution in original post

2 Replies
pk
Level 12
Level 12

Is 'residency starting date' the date a foreign spouse's (rental) income becomes reportable/taxable?

@turb0tax_newbie  do you still need an answer on this topic ?

 

Generally, world income needs to be reported from the date a person becomes a resident ( Green Card or for tax purposes ).  In your case if your  husband  was not in the USA prior to being admitted  with Green Card, then any foreign income  does not come under the purview of the US tax procedures/rules.

You also used "we" on owning / operating a foreign  rental income property and thus if one of you ( the owners) were in the USA earlier then I think you would need to recognize  this foreign income (depending on the state  there may be community property rules to consider ) on your return -- irrespective of  whether he needs to report this or not.  

If you want a more specific answer . please provide details of the situation --- (a) are you a citizen/Resident and if not when did you enter the USA -- for 2019 ; (b) your husband's citizenship;  (c) in which country is the rental property and what type etc. etc.

View solution in original post

Carl
Level 15

Is 'residency starting date' the date a foreign spouse's (rental) income becomes reportable/taxable?

income from our foreign property

"OUR" foreign property rental income is reported for the entire year if you are a named owner of the property also.

 

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