Specific Instructions

Unless otherwise specified, answers to questions seeking information for a tax year generally refer to the tax year in which you became (or ceased to be) a bona fide resident.

Name and social security number (SSN).   If you file a joint return, enter only the name and SSN of the spouse whose information is being reported on Form 8898. If both you and your spouse are required to file Form 8898, file a separate Form 8898 for each of you.

Line 1

Check line 1, box a or b, whichever applies, and enter the tax year you take the position that you became or ceased to be a bona fide resident of a U.S. possession.

Example.

Mr. Grey, a U.S. citizen, moved from New York to the U.S. Virgin Islands on March 1, 2011. To take the position that he became a bona fide resident of the U.S. Virgin Islands in 2011, Mr. Grey checks box a on line 1 and enters "2011" on the line provided.

Line 2

If you are not a U.S. citizen, you are either a nonresident alien or resident alien of the United States. You are considered a resident alien of the United States for U.S. tax purposes if you meet either the green card test or the substantial presence test for the calendar year (January 1 through December 31). If you do not meet either of those tests, you are considered a nonresident alien. For more information about these tests, see Pub. 519.

Line 4

If you checked line 1, box a, enter on line 4a the exact date (month/day/year) you moved to a possession to establish bona fide residence. If you checked line 1, box b, enter on line 4b the exact date (month/day/year) you moved from the possession to end bona fide residence.

Example.

Mr. Grey, a U.S. citizen, moved from New York to the U.S. Virgin Islands on March 1, 2011. Mr. Grey would enter “March 1, 2011” on line 4a.

Line 8

Earned income is wages, salaries, professional fees, and other amounts received as compensation for personal services actually rendered, including the fair market value of all earnings paid in any medium other than cash. Professional fees include all fees received by an individual engaged in a professional occupation (such as doctor or lawyer) in the performance of professional activities. See chapter 2 of Pub. 570 for information to determine if you have any earned income from U.S. sources.

Lines 12 and 13

See Permanent home, earlier. If you have more than one home, your principal permanent home is ordinarily the permanent home you live in most of the time.

Line 14

Your immediate family means your spouse and minor children.

Line 22

Under state law, a homestead exemption may:

  1. Protect the owner of real property from a forced sale or seizure of the property from creditors (for example, in a bankruptcy proceeding), or

  2. Provide a reduction in state or local real property taxes to qualified homeowners.

In some states, for individuals to avail themselves of these privileges, state laws require a designation of the homestead property, the filing or recordation of a declaration to make the exemption operative, or an application for the homestead tax exemption. If either of the following apply, answer “Yes” on line 22 and indicate the state in which such designation, declaration, recordation, application, or property tax exemption was made.

  1. You made a designation of homestead property or otherwise filed or recorded a declaration concerning property under a state homestead exemption law, or

  2. You applied for or took a homestead tax exemption from state or local property taxes.

Lines 26 and 27

See chapter 2 of Pub. 570 for information to determine the source of income.

Line 28

For stocks and bonds, indicate the country of origin of the stock company or debtor, and for U.S. companies or debtors, the state or possession of incorporation or formation.

For example, if you own shares of a U.S. publicly-traded Delaware corporation, the investment is considered located in the United States (that is, Delaware), even though the shares of stock are stored in a safe deposit box in a foreign country or possession.

Line 32

A gain is the amount you realize from a sale or exchange of property that is more than its adjusted basis. See Pub. 544, Sales and Other Dispositions of Assets, for the definitions of amount realized and adjusted basis.

Special source rules apply to gains from dispositions of certain property within 10 years of becoming a bona fide resident of a U.S. possession. See Special Rules for Gains From Dispositions of Certain Property in Pub. 570 for more information.


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