Earned income - community (shared) income where one spouse is non-resident and other is UK national. Neither lives in USA?
Publication 515 states : If you are a U.S. citizen or resident alien and do not choose to treat your nonresident alien spouse as a U.S. resident for tax purposes, treat your community income as explained next under Spouses living apart all year. How-ever, you do not have to meet the four conditions dis-cussed there.
If he elects to treat his SA spouse as USA tax resident and joint file, the SA national we are told may not claim the treaty benefits ie full LT capital gain now IRS taxed, increased NIIT!
My argument is that the SA spouse is not a non-resident alien - he does not reside in USA and can thus not be "alien". He is merely non-resident. If this is true and correct can we split the earned income in two?
If not and we joint file, can we double up on the $99200 foreign earned exemption?
Client normally self-files on paper, I do SA tax and ensure the two returns dovetails.
Be so kind and consider the questions above and if it is your expertise - feel free to make contact and send a filing quote please
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