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Old 12-18-2017, 01:03 PM   #1
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Usa tax claim house build now sold firpta

Apologies in advance for this long winded request for some guidance on USA taxation laws and who is truly in the know on FIRPTA we can speak with direct.

I'm hoping that someone here might be able to give me a contact telephone number in the USA where I can actually talk to officialdom direct in the know (not untold recordings), as different accountants (all supposedly FIRPTA experienced) down in Fla (Sarasota, Venice, Tampa), have advised us differently on what we can/can't claim as an actual expense against the cost of building our house (2009 with COO Certificate of Occupancy, Jun 2010) we sold in Sarasota end Aug 2017.

i) We have applied and received a TTIN for both hubby and I, and understand we need to file claim back for End Dec year end.

ii) When we sold the house (Aug 2017) we had automatically taken off by the RE lawyers 10% of the sale price as per FIRPTA rules (unless we applied for a withholding exemption at the time which we chose not to do for ease) and lawyer submitted that 10% off the full sale price to Uncle Sam.

iii) The cost to build/sell is where we have the most confusion because some accountants are saying we can claim all, some saying some and others not at all on the following items:

a) initial return flights, accommodations, hire car etc for viewing/reccy trip to source a suitable property/lot (Mar 2009).

b) After putting in an offer "sight unseen" on a lot, the return flights, accommodation, car hire to confirm suitable, source various quotes for a build, meeting architect and prepping documentations etc for closing within a couple weeks (May 2009)

c) Early Sept 2009 return Flights down(4 nights accommodation) to meet with potential contractors and start the ball rolling for planning permission submission to build.

d) Nov 2009, Planning permissions approved and drove MH (for hubby to stay in during build process) and Durango down from Alberta to Fla to commence build. Cheapest option over car hire and renting for months during build process. Can we claim the cost of gasolines getting down to Fla and return after build and also the cost of the RV at CG for several months during build process?

e) Due to the fact hubby is Canadian and only allowed maximum number of days in the USA in any one year, he would return to Canada every 8 to 10 weeks to offset over staying and usually whilst a specific trade he felt comfortable leaving in situ was there. I also would replace his presence to meet this Foreigner in USA presence restriction requirement, but to keep the build process ticking along. So again can we claim a handful of return flights due to this as an expense for cost to build?

f) Can we claim return flights and car hire for when we went down initially in 2015 to prep and put this house on the market for sale? And/Or when we relisted it in better market conditions this year?

g) Can we claim our costs down and back to Alberta in August this year to wrap up the house sale agreed. Both flew down, but drove Durango back so 4 Motel nights and gasoline plus foods?



We totally understand we can't claim for flights, accommodations or car hire etc for visiting/vacations after the house was finally built/COO was granted and up until putting it on the market (2 separate occasions) but as stated before we are getting conflicting advice from those you'd assume were in the know (FIRPTA experienced Accountants) and be singing off the same hymn sheet, hence why we want to hire a professional to submit our tax forms, but need to know for sure they are aufait with what we can claim as an expense (cost of build etc) for sure under FIRPTA!

We know any repairs, renewals, major additions etc can be claimed (such as driveway pavered in 2014, painting/prepping for sale) and that because hubby and I owned it for over a couple of years there is some tax break there but it's all the Cost of Build versus Cost of Sale expenses on flights, car hires etc, we are struggling with getting concrete answers on for sure.

Hubby and I have built lots of homes over the years so we oversaw the build, sourced materials and got quotes from trades etc ourselves so to what extent do we need to detail costs? Line item per each receipt or grouped by category on a spreadsheet? We know we've had deducted way more tax than we are liable for over expenses and we are happy to pay what we genuinely owe, which is of course a lot more for Uncle Sam, than if we'd paid a local builder with his mark ups on top at build stage, but naturally want to make sure we are claiming what we are legitimately entitled to claim back.

Thanks in anticipation for your guidance/contacts to resolve this.

H.
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Old 12-18-2017, 01:30 PM   #2
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I don't know if you can get a solid answer to your question as your situation is pretty unique. I can give you a general response as to how we would handle a real estate transaction like you are describing. We would tend to capitalize ALL costs associated with the purchase, construction, and payment of real estate taxes. Now, does that mean you won't get audited? No, not at all. By capitalizing all the costs you may still get challenged and you may have to defend that deduction.

That's the best I can tell you based on what you had described.
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