We came to GA in 2005 to work with L visa, stayed for 4.5 years and in Sep.1, 2010 moved to Europe (not the country we were born in), in 2007 we bought a house in the US and as of Sep. 1,2010 rented it.

The question is what do we do with our 2010 tax return?

One CPA says that the default is that we are residents for the entire year even though we've left in Sep, so we can file jointly and also need to report our revenues from Europe.

The other CPA says that since we're not US citizens the question is what was our visa type by 12/31/10? If you are on B visa then you are non resident in the last day of the year. If during the year you were resident then you are a dual status resident. From 1/1/10 until Sep 1st. You are a resident filing a 1040. From the day you left until the end of the year, you are non resident and should file 1040NR. There are no options here or elections we could take, This treatment is mandatory.

The first CPA is correct. Your default position is that you are resident through the end of the year.

You also need to submit a Residency Termination Statement with your 2010 return to terminate your residency status in the eyes of the IRS. This is important because you will have to file a Schedule E with Form 1040NR in future yeara to report the rental income.

Without the submission of the Residency Termination Statement, the IRS will query you about ALL world-wide income because they will STILL consider you to be a resident alien.

If you need professional help filing your return, email me at [email protected] or [email protected].

Atlanta rocks! Thanks for the quick and clear reply.

Glad to help!