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US: IRS 2555 - Question about storage

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  1. #1

    Post US: IRS 2555 - Question about storage

    Typically storage means moving your stuff to a faciity meant for storing things while they collect your money on a periodic basis while you are away.

    Since work in HK might take a maximum of 3 years and then return back to US, could I use my apartment as storage instead of a storage facility?

    I'm asking this question because the amount of belongings I have will take up a lot of storage, which is not cheap, and I can store a car in the garage in the townhouse apartment. I don't mind paying the rent for 3 years and I will come back to the apartment from time to time to check up on things.

    Thanks in advance!


  2. #2

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    Is this about income tax ?


  3. #3

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    Quote Originally Posted by Morrison:
    Is this about income tax ?
    Probably a deduction.

  4. #4

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    There is a limit on housing expenses and claiming the cost of renting a townhouse apartment as "storage" seems to be a terribly expensive way of doing things and could trigger an audit.

    Speak to a US tax advisor and see if you can claim for the cost of maintaining a second home which seems to be what you are actually doing.


  5. #5

    Definitely a deduction. Form 2555 (Foreign Income) and Publication 521 (Moving Expenses) do not mention apartment or house as storage. I think if they do, it would only be covered for 30 days after the move. I do need an expat tax consultant. And I definitely would not want to be audited. I will need to check for storage quotes to see the difference between storage and rent.


  6. #6

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    Under many countries tax regime, if you keep a place back home you are still subject to income tax,
    just like any other citizen living there.
    I know, as an US citizen you are anyway, but you get a 100k exemption when you live abroad.
    Look into how maintaining a house back home affects your income tax liability


  7. #7

    Thanks Morrison! Yes, I know we have to pay like 40% taxes anyway and there is an exemption on the first $100k USD. Since the stint will be around 2-3 years, we thought it would be way too much money and work to move our stuff into storage and back to an apartment or house when we come back to the US. That way, when we get back everything is there waiting for us :-) I hate moving and I think it's one of the most stressful things just like divorce or having a new baby. Especially I will need to do it on my own since my spouse can't just take a week or two off as he will be starting this July and my son and I will be in the US for his preschool for the Fall semester. Planning to move to HK in November/December timeframe which means I will have to do all the moving on my own with movers or professionals. Still stressful though especially with a 3.5 year old at my side all the time.


  8. #8

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    If this is also about maintaining your US residence as storage, it may also trigger state taxes and challenge your being a bona fide resident abroad. Tread carefully.

    Australia I know is different but for those authorities we had to rent our house out and break evidence of residency.

    The IRS has a lower burden of proof, but check.

    Morrison and librarygirl2 like this.

  9. #9

    Will check with a tax advisor! Thanks @fth.


  10. #10

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    Quote Originally Posted by librarygirl2:
    Will check with a tax advisor! Thanks @fth.
    The nearest IRS is at da embassy in Beijing
    email communication works well

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