Does anyone know if there's a specific form for this certification or is it just a statement you write up? My closing is next week and I want to make sure I do this right.

@Butch Sledgehammer There isn t'a specific IRS form for this certification. It s'typically a written statement you provide to your settlement agent/title company stating that you meet the requirements for the principal residence exclusion. The statement should include: 1 You) owned and used the home as your principal residence for at least 2 of the 5 years before the sale, 2 Your) gain doesn t'exceed the exclusion amount $250k (single/$500k married ,)and 3 You) haven t'used the exclusion on another home sale within the past 2 years. Your title company or real estate attorney should be familiar with this and can help you prepare the proper language. Make sure to get this to them before closing!

This is such helpful advice, thank you! I'm actually in the middle of dealing with this exact situation right now. Quick question - when you mention adding home improvements to the cost basis, do things like new appliances count? Or does it have to be major renovations like kitchen remodels? I kept most of my receipts but want to make sure I'm not claiming things I shouldn't.

I second this! The QBI deduction (Section 199A) can be really valuable for rental properties. Just make sure your properties qualify as a "trade or business" under Section 162, which it sounds like they would with your level of activity. Our cabin rentals saved us about $9,400 last year with the QBI deduction.

Is there a specific form or tax treatment the partnership needs to handle for foreign partners? Our partnership accountant seems clueless about having non-US partners and I want to make sure they're doing everything correctly on their end.

Yes, the partnership needs to handle several specific requirements for foreign partners. They should be filing Form 8805 to report withholding on effectively connected income allocated to foreign partners, and they need to issue you Form 8813 showing any tax withheld on your behalf. On your K-1, they should check the "Foreign partner" box and complete Box 20 with foreign partner-specific allocations and any treaty benefits. The partnership also needs to withhold tax under Section 1446 on your share of effectively connected income (even if it's a loss in your case, they need to track this properly for future years). I'd recommend giving your partnership accountant IRS Publication 541 (Partnerships) and specifically pointing them to the sections on foreign partners. If they're still confused, they might need to consult with a tax professional who has experience with international partnership taxation.

This is really helpful, thank you! I'm in a similar situation as the original poster. One question - you mentioned that losses can be carried forward to offset future partnership income. Do you know if there are any limitations on how long these losses can be carried forward, or any special rules that apply specifically to foreign partners? Also, when you filed your 1040-NR with the partnership losses, did you need to include any additional documentation beyond the K-1 and Schedule E?

Great question about loss carryforwards! For foreign partners, the same general rules apply - partnership losses can be carried forward indefinitely until used, but there are some nuances. The losses are subject to basis limitations (you can only deduct losses up to your basis in the partnership), and as a foreign partner, you need to track your basis carefully since it affects future effectively connected income calculations. Regarding additional documentation, beyond the K-1 and Schedule E, I also included a statement explaining my foreign partner status and any applicable tax treaty benefits (since I'm from a country with a US tax treaty). Some tax professionals recommend including a brief explanation of your non-US person status to help the IRS process your return correctly. One thing to watch out for - if your partnership generates income in future years, you'll want to make sure you're tracking these loss carryforwards properly since they can significantly reduce your US tax liability. Keep good records of your basis adjustments from year to year!

The 100% vs 110% threshold is based on your PRIOR year's income, not your current year income. If your AGI in 2023 was under $150k, you only need to pay 100% of that 2023 tax liability to meet safe harbor for 2024, even if your 2024 income will be much higher due to capital gains. If your 2023 AGI was over $150k, then yes, you'd need to pay 110% of your 2023 tax to meet the safe harbor for 2024. It's a common misconception that current year income affects which percentage applies, but it's actually based on the previous year.

This is exactly the kind of practical advice I was looking for! I've been overthinking this whole situation and your explanation really clarifies things. Making the payment early after realizing the gains makes total sense - better to be proactive than scramble at the deadline. One follow-up question: when you say "overpayments from prior years" count toward the safe harbor, do you mean if I had a refund last year but chose to apply it to this year's taxes? I think I might have done that but honestly can't remember - would that show up somewhere on my tax documents? Also appreciate the reminder about spouse withholding. My partner has been working all year with regular withholding while I've been between jobs, so that should help reduce what I need to pay in estimated taxes.

This is really helpful clarification! I'm also a nonresident alien (on F-1 visa) and have been struggling with the same HSA confusion. It's good to know that if Box 1 matches Box 16 on the W-2, it means the employer already handled it correctly by not excluding the HSA contribution from taxable income. I was getting worried that I'd made some major tax mistake by having an HSA account that my employer set up automatically. Sounds like as long as the contribution is properly included in taxable income (which it seems like it already is based on the W-2 boxes matching), then we're in compliance even though we can't claim the HSA tax benefits that residents get. Thanks for taking the time to call the IRS and share what you learned - definitely saves the rest of us from the same headache!

Great question about keeping the HSA account open! I'm in a similar situation as a newcomer to understanding all this HSA complexity as a nonresident alien. From what I've been reading in various tax resources, you can actually keep the HSA account open even as a nonresident - you just can't make any NEW contributions or claim the tax benefits that residents get. The money that's already in there can stay invested and grow, but any future contributions would need to be treated as taxable income (which sounds like most employers are already doing correctly based on the W-2 Box 1 vs Box 16 discussion here). I think the main thing is making sure your employer's payroll department understands your nonresident status so they don't exclude HSA contributions from your taxable wages going forward. It might be worth having that conversation with HR to avoid any confusion in future tax years. Has anyone here actually had issues with their employer's payroll system incorrectly excluding HSA contributions from taxable income for nonresidents? I'm wondering how common that mistake is.