519. USA Primary Residence tax

exemption on sale of property in

India

Question: Hi Mr Chand, We bought a land for building our primary residence in India. this was when we were in India. later that year we moved to USA . We did not have Greencard so still kept the land to build our home if we have to return back . We got our Greencard last year and bought a home here in US. Now we want to sell the land in India . There is some capital gain on the land . Is there a way we can get the primary residence tax exculsion when we sell this land. Thanks SJ Answer: I assume you are referring to the primary residence tax exclusion when filling US taxes. The US tax laws allow a tax exclusion of up to $250,000 for an individual and $500,000 for married couples filing joint returns. However there are some rules that must be met for such a deduction to be allowed. 1. You must have owned the property for at least two years and 2. You must have used the property as your principle residence for at least two of the five years before the sale. The two years need not be continuous. The sale of vacant land is probably not the sale of your primary residence. You could check with a tax accountant if there is a possibility to make the claim when filing your taxes. Rules and regulations do change from time to time. The IRS has a excellent website that answers may tax related questions that may help. Their website address is www.irs.gov