Question

1040 line 25 for 8288a

Forum|Forum|3 years ago
February 8, 2023
1 reply
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I sold my home after one year and my wife was not in the USA due to travel restrictions due to covid (Philippines). The title company withheld 5% of the total sale price because she had not lived in the home. She doesn't have residency anymore and was not present so I was given a copy of a 8288-a form and doing my taxes I entered this amount on line 25 of my 1040.

The more I research this the more confusing it becomes. My spouse's social security number is on the joint return and I would think it would 'automatically' be recognized by the IRS. I have the downloaded TurboTax version and no ability to upload the form from the title company (first time for them) and I wasn't told about the 8288b and getting the tax withholding reduced nor did she receive any correspondence which I was told she would.

Is there something I'm missing? I just see a lot of documents another 1040NR and others which don't apply to me as I was a USA resident for most of 2022 and a citizen from birth.

Any advice greatly appreciated

R

RobertB4444

To start with, I would take this to a tax professional. The exclusion for the sale of a primary residence is a big deal and there is no reason why you should not get it for both you and your spouse provided you are both citizens and she had the home listed as her primary residence and was only unable to live there due to travel restrictions.

If there are issues with your wife's citizenship then that may make a difference as well.

If you are going to continue with self-preparation then I advise you to enter the home for the exclusion into your tax return and try adding a letter to the IRS explaining your situation and then mailing your return instead of filing electronically. It will significantly delay whatever refund you are due but it will be the safest way to deal with this.

@jeffo45

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J

jeffo45Author

Thanks for the timely advice. My wife is not a citizen nor a LPR as she had returned to her home country but the title company asked me info about her then withheld taxes from the complete sales price which I had paid cash for. She does have her SS # as that doesn't expire. I'm living overseas now myself and finding a tax pro locally who can guide me is a slim chance.

I assume they will send a request for more documents to my foreign address from which I filed, so yes I think this will take some time. The withholding covered the capital gains and and my retirement income by about triple so I assume I won't owe them as the IRS has the withholding money.

My wife never lived in the home and was not on the title but it was a one signature to buy two to sell state so I have a POA form that I used in selling the property and also covers all financial stuff...

Maybe I need to take a trip back to the states to straighten this out eventually

Thanks again!

D

DianeW777

If you mail your tax return you can include the Form 8288-A copy B with your return as proof of Foreign Investment in Real Property Tax Act (FIRPTA) tax withholding. Include the amount in your tax return by using the steps below. Also include the sale in income unless you qualify for the home sale exclusion (it doesn't appear as though you do based on your comments). The rules for home sale exclusion can be found at the link below.

Sign into your TurboTax account > once inside the return select Deductions and Credits at the top
Scroll to Estimate and Other Taxes Paid > Show More > Start/Revisit beside Income Taxes Paid > Scroll to Other Income Taxes Paid in 2022
Continue to Start Withholding not already entered on a W-2 or 1099

This will allow both federal and state additional withholding not entered in any other location.

For Future Use:

You can file a Form 843 (Claim for Refund), together with a Form 8288-A, to show the estimated tax on the sale. This is the IRS's official process for obtaining an early refund of FIRPTA withholding.