Am I right to assume that it is only for earned income from employment or investments?
So if I sold my home (main residence) and the proceeds are held in my savings account because I haven't purchased another property yet as I haven't found one yet, the savings would not be included in the tax review?
So the bank has sent me the forms to complete because of the large amount of sale proceeds in my account?
Will the US ask me to prove how I obtained the funds?
What I am worried about is that the funds includes the original deposit I put down to purchase in addition to the gain.
Would I be able to deduct the costs to purchase in addition to costs to sell?
In the UK, there are no taxes due on gains of the sale of your main residence, tax is only applicable for 2nd homes/investment property so this feels unfair!
In the UK for capital gains tax you can include the costs to purchase, for example Stamp Duty Tax which is 3% of the purchase price, plus legal fees to purchase, and any improvements. Can I include for the US calculation: the Stamp Duty and legal fees to purchase?
-Would they calculate the $250,000 threshold based on the exchange rate of USD/GBP on the day of the sale?
-What % tax is calculated on the difference after $250,000?