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guluoguawen · Dec 28, 2011, 04:54 PM

Dear Sir/Madam,

I have questions regarding the 8938 and would appreciate very much if you could answer my questions.

1. I am a canadian and moved in USA 3 few years ago. But my family continued to live in Canada last month;

2. We bought a house in Canada about 10 years ago and we lived in the house until we sold the house and my family moved in USA last month;

3. I got my GC this year and I submitted GC application for my family after they moved in USA last month;

4. After we sold our house, we deposited the money from the house sale (about CAN$200,000) into our bank account in Canada. We are going to change the money from Canadian currency into US currency when the exchange rate is good and then transfer the money into our US bank account.

Questions
1. We did not file anything in USA about our house in Canada before. Did we have to do something about our house in Canada (report to USA about the house)?
2. Do we need to file form 8938 for tax year 2011, as we have about CAN $200,000 (from the house sale) in our Canadian bank account?

Thank you very much in advance!

MukatA · Dec 29, 2011, 02:32 AM

1. Every U.S. citizen and resident must report worldwide income. So you are required to report the sale of home in Canada except if you qualify for exclusion of gain from the sale of main home.
If you owned your main home for two years and lived for two years in past five years, then you can exclude gain of up to $250,000. If you are eligible to exclude the gain, you do not report it on the tax return. If your spouse meets this condition, she also gets exclusion of $250,000 Your U.S. Tax Return: Profit From the Sale of Your Home

2. You must file Form TD F 90-22.1. It appears that you also need to file form 8938. You should go through the instructions to Form 8938. Anyway, it is a very small form and will not take much time.

guluoguawen · Jan 1, 2012, 06:55 PM

Dear MukatA, thank you so much for your answers to my questions!

I have a few more questions after I read your answers. I would appreciate very much if you could further help me out:

1. What is the gain from the sale of main home? Is it the sale price or the difference between the sale price and the purchase price? The actual sale price of my house is about 20% lower than the price, at which I bought the house 10 years ago.

2. As per my situation, do you think if I am eligible to exclude the gain from the sale of main home? My family lived in the house for 10 years until moving into USA recently, though I moved into USA and lived in a rental apartment since 2008 to file green card application.

3. What is the difference between the form TD F 90-22 and the form 8938?

Many thanks again and Happy New Year!

MukatA · Jan 2, 2012, 10:33 PM

1. If sale price is lower than the purchase price, you have a loss.
2. On US tax return, you do not report this sale as loss from sale of personal property is not deductible.
3. You file Form TD F90-22 if at any time in a year, you total deposits in foreign financial institutions (includes banks, mutual funds... ) is $10,000 or more.
You file Form 8938 if your foreign assets are $50,000 or more. Your U.S. Tax Return: U.S. Citizen or Resident with Foreign Income

guluoguawen · Jan 5, 2012, 06:46 PM

Dear MukatA, thank you very much again!

As per your answers and your site, I have found some related information and will read them to better understand your answers.

Appreciate very much!

guluoguawen · Mar 4, 2012, 03:18 PM

Dear MukatA,

I am once again asking for your help, as I am preparing my 2011 tax return. I will file both TD F 90-22.1 and 8938 for 2011. However I am not quite sure if I need to file TD F 90-22.1 for 2010 (we did not have more than $50000 in my foreign accounts before we sold our house last year). In 2010 and two years prior to 2010, I lived in USA during weekdays and returned to Canada during weekend days but my family lived in Canada until they moved in USA last Oct. All my foreign accounts are jointly-owned with my wife.

Appreciate very much for your advice!

MukatA · Mar 4, 2012, 07:59 PM

For TD F 90-22.1 the limit is $10,000. Form 8938 is a new form and 2011 is the first year.

guluoguawen · Mar 5, 2012, 07:42 PM

Dear MukatA, thank you so much for your help! Could you please further help me understand the following question.

For green card application, I moved into USA in 2008 while my family still lived in Canada. I did not know TD F 90-22 before but did report all interest income in my 1040 for 2008, 2008 and 2010, from our joint accounts in Canada. I wonder if we should file TD F 90-22 for those years before my family moved into USA?

Many thanks again!