Sale of Residence

[susieq]

Lots of issues: tp moved to Australia in Jan 06 - married in 06 to Aussie. She has a home in Colorado that a friend is staying in. If she would sell the home - what would the exclusion be (if any) Her husband has not lived in that home, she has been away going on two years. She is no longer single.

What about converting to a rental - she says she is not prepared to sell at this time. Her gain is about $100,000.

[solomon]

Of course

if she lived in it two years out of the previous five prior to sale she is entitled to an exclusion of 250k. Conversion to rental would have a basis of the lower of fmv or adjusted basis on the date of conversion. I assume she is a citizen or resident alien of U.S.

[susieq]

Sale Of Residence

I was concerned because her marital status has changed and her husband has not lived in the US. Did not realize that she would take the exclusion as Single at the time of a future sale. She is a citizen of US but has been living in Australia since Jan 2006 with a couple of months in US in the summer of 2006.

Another issue - I assume that for 2007 she can exclude Australian income ( around $60,000. ) from 1040 due to the fact that she will qualify for "physical presence test". From Jan 07 to Dec 07 she will be in Australia 334 days.