Hi
My wife and I who are UK citizens have just received a huge tax demand from the IRS based on an unreported gain from a property sold in 2017. We were living and working in the US between 2014 and early 2018 and were resident aliens.
The tax demand relates to a property in which we lived and owned from April 2014 to June 2017. Based on the IRS publication 523 we pass all the normal eligibility tests i.e. Ownership, Residence and Look-Back tests. This means we should be entitled to an exclusion gain of $500,000 which is well in excess of the gain we made. Our concern however relates to Eligibility Test 1 - Automatic Disqualification and the following bullet point:
. You are subject to expatriate tax
Does this just relate to US citizens, or does it relate to non US citizens? I would be very grateful if someone could put my mind at rest and confirm that we are not subject to expatriate tax.
Many thanks
Paul
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