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Foreign Earned Income/Housing Exclusion

Asked Feb 3, 2009, 04:43 AM — 1 Answer
Hi,

We are US Expats in Dubai, UAE

We purchased a home in September 2008.

We had it rented for the months of Sept & November and moved into it in December 6, 2008.

We had a small loss on the Rental during that time.

Can I still take the Housing Exclusion for the ProRated portion of the year that we were Renters? (Until December 6, 2008)

And Can I take it all the way to December Move In date as we still had to Pay Rent until we could occupy the home? Or the minute we became owners, the exclusion ended?

And could I take any sort of 'loss' on the amount we were negative while we rented back our home to the previous owner?

Thanks for your help?

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AtlantaTaxExpert Posts: 19,866, Reputation: 3723
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Feb 6, 2009, 10:51 AM


During the time you rented it, it was a business property, and you must report the income and expenses on Schedyle E. You CAN claim the loss provided your income is not too high to cause the Passive Loss Limitation to kick in.

Yes, you can claim the housing exclusion for the period you were renting.
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