I havent filed taxes since 2011, concerned about my house

Bobby Luthra

New Member
Jurisdiction
Florida
Hi, I am a US citizen but live in India since 2011. I have a home in Florida. The reason I didnt file taxes is because I didn't have an income. The home is rented however all the rent went to pay mortgage and insurance. Is there any risk to the home? What do you recommend I do?
 
Hi, I am a US citizen but live in India since 2011. I have a home in Florida. The reason I didnt file taxes is because I didn't have an income. The home is rented however all the rent went to pay mortgage and insurance. Is there any risk to the home? What do you recommend I do?

If you had renters in the property then you had gross income, and almost certainly enough to be required to file federal income tax returns. Whether you actually had tax to pay is another matter. You'd be able to deduct various expenses you paid in repairs, fees you paid to any management company to manage the place for you, your insurance payments, property taxes, interest on the mortgage, etc. You'd also have a depreciation deduction to take on the building and other structures, too. The mortgage principal payments are not deductible, though. See IRS Publication 527 for the details. You'd need to include on your return any other income you had, too, including income you got in India or any other country. However, you do get to claim a foreign tax credit for income tax you had to pay to the foreign country on that foreign income. See IRS Publication 54, which is the tax guide for citizens living outside the U.S.

Note that the statute of limitation (SOL) on assessment of tax does not begin to run until you file the tax return for the year. So right now the IRS could come after you for all the years you didn't file, though in practice the IRS usually only goes back about 6 years. If you owe tax, there will be significant late filing and late payment penalties added along with interest, and the longer you wait to file a return and address the payment issue the more it costs you.

The IRS will know about the rental property when you sell it because the buyer will be required to file a 1099-S reporting the sales price to the IRS, and then you'll have report that on the return for the year of the sale. That may well open up the issue of why previous returns were not filed.

I suggest you construct at least the last six years of returns and see what tax, if any, you owe for those those years. It might be a good idea to get help from a tax professional. Once you know where you stand, you can then develop a plan for filing them and dealing with any tax owed.
 
Hi, I am a US citizen but live in India since 2011.

Good for you, mate, good for you.

I have a home in Florida. The reason I didnt file taxes is because I didn't have an income. The home is rented however all the rent went to pay mortgage and insurance. Is there any risk to the home?

If I were in your position, SAFELY ensconced somewhere in lovely India (the planet's OLDEST democracy) you might be better off if you sold the home.

If you sell the home, you could have the proceeds deposited in your Indian based bank.

If you attempt to remediate your 11 year tax filing hiatus, your effort to right any wrongs MIGHT be met with a harsh rebuke and a demand for you to pay Uncle Sammy a ridiculous six (maybe seven) figure sum of US DOLLARS immediately.

If you're thriving in India, give thoughtful consideration to staying right where you are today for the rest of your life.

If you were residing in the home, I'd suggest a different approach.

The US tax authorities are greedy, thuggish, brutish bullies with an insatiable desire to confiscate as much of your money as they can; showing no mercy, compassion, or regard for the "little people".
 
The IRS will know about the rental property when you sell it because the buyer will be required to file a 1099-S reporting the sales price to the IRS, and then you'll have report that on the return for the year of the sale. That may well open up the issue of why previous returns were not filed.

I suggest you construct at least the last six years of returns and see what tax, if any, you owe for those those years. It might be a good idea to get help from a tax professional. Once you know where you stand, you can then develop a plan for filing them and dealing with any tax owed.

Sound, solid advice.
 
My yearly rental income was 21k
Standard deduction as head of household is between 12-18k for those
years
There was no income in India
So total income less than 10k which means no taxes
Is that correct
These are just rough estimates
 
If I were in your position, SAFELY ensconced somewhere in lovely India (the planet's OLDEST democracy) you might be better off if you sold the home.

If you sell the home, you could have the proceeds deposited in your Indian based bank.

If you attempt to remediate your 11 year tax filing hiatus, your effort to right any wrongs MIGHT be met with a harsh rebuke and a demand for you to pay Uncle Sammy a ridiculous six (maybe seven) figure sum of US DOLLARS immediately.

To the extent you are advising the OP to sell the home and not report the sale and to not file any returns for the rental activity, what you suggest is tax evasion, a federal crime and one for which the U.S. may extradite from India if it chose to do so. In any event, as a lawyer I think you would agree it is improper to counsel committing crimes.

The US tax authorities are greedy, thuggish, brutish bullies with an insatiable desire to confiscate as much of your money as they can; showing no mercy, compassion, or regard for the "little people".

You are entitled to your opinion, but as someone who worked for the IRS as both an officer and attorney I strongly disagree with your characterization of tax agencies as a whole. I would guess that having once worked for the Army you would similarly reject the characterization of Army personnel as crazy gun nuts and brutal baby killers, as some have done. Working for an organization allows you to understand it in ways that the person on the outside does not. And often the person on the outside truly has no idea what large government agencies really do, be it the IRS or the Army or whatever.

While some tax agencies are difficult to work with, the IRS can be quite reasonable in its dealings with taxpayers, especially the "little people." It has an unpopular job to do, which encourages the kinds of opinions like yours, but it takes a pretty practical approach to its enforcement of the tax laws. The IRS is far from perfect, of course, but most of the complaints I see about the tax laws and enforcement of it are really complaints of our wonderful representatives and senators in Congress who write those laws and determine tax policy. Somehow people think the IRS makes those decisions, when it in fact it is Congress that does that.
 
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My yearly rental income was 21k
Standard deduction as head of household is between 12-18k for those
years
There was no income in India
So total income less than 10k which means no taxes
Is that correct
These are just rough estimates

With those figures it is possible that there would have been no tax. The standard deduction and personal exemptions (for the years when the personal exemptions were available) would offset a good portion of the income. And if your rental expenses, including depreciation, reduce your rental income below the standard deduction + personal exemptions there would be no tax to pay for those years if there is no other income. You really need to run the numbers, but even if you owe some tax here, it would likely not be all that much, though interest and penalty would add a fair bit to it. So prepare the returns and see how it comes out. That's the best way to figure out where you stand and from there work out how to proceed.
 
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