Moving back to the US after claiming FEIE for years

[hankmoody]

Hey guys,

I have a few quick questions.

Including 2018, I will have been a digital nomad living abroad for 330+ days and claiming the FEIE for the past 3 years. However, in January 2019 I will be moving back to the US with my fiance and living in the US for 3 years, until she is able to get her citizenship. Then we will leave the US again and only return back once a year to maintain her status. I've read some information about how this affects my tax status etc, but I'm not quite sure I understand it.

1) Since I will no longer be using the FEIE while in the US, do I will have to write in a letter in 2019 saying I will no longer be claiming the FEIE?

2) It says I cannot claim the FEIE for 5 years after this? Is that's true? So when I move back abroad after 3 years, I still have to wait another 2 years before I can claim the FEIE again?

3) What about the foreign tax credit? Can I use this for my international stock holdings I have in my taxable account, or can I not claim any foreign tax benefits at all?

Thanks for all the help.

[gocurrycracker]

Hi Hank, welcome

You don't have to write a letter.

You can claim the FEIE when you leave again. The letter and blackout periods are only if you qualify for the FEIE but choose not to use it.

You can use the FTC.

That's my understanding anyway

Cheers

Jeremy

[hankmoody]

Sweet, just the answer I was hoping for! This will work out perfectly! Hate to bother you again, but I have another quick question. After googling around for a bit, I can't seem to find the answer to this.

I know that when living abroad, I'm only able to claim either the FEIE or Foreign Tax Credit for my earned income. Does this apply for capital gains as well? What I mean is, can I claim the FEIE for my earned income and then claim the foreign tax credit for the international stocks I hold in my brokerage account (Vanguard's VXUS)?

[gocurrycracker]

Yes

[GOFU]

If your fianc?e/wife is naturalized as a citizen there is no need to return once a year to maintain her status. As a citizen she is free to roam the world for as long as she wants just like any other citizen.

For legal permanent residents (green card holders) there are restrictions, but not for citizens.

[hankmoody]

If your fianc?e/wife is naturalized as a citizen there is no need to return once a year to maintain her status. As a citizen she is free to roam the world for as long as she wants just like any other citizen.

For legal permanent residents (green card holders) there are restrictions, but not for citizens.

Yup, thanks for the response. Have done some more research since this post. It works out perfectly for my lifestyle. Just travel around in the US for a few years, spend some time with family, etc, until she becomes a citizen, then we're free to be wherever and whenever we want!