Special Rules in the Year of a Move(p6)

If you are moving to or from a possession during the year, you may still be able to meet the tax home and closer connection tests for that year.

You will satisfy the tax home and closer connection tests in the tax year of changing your residence to the relevant possession if you meet all of the following.

• You have not been a bona fide resident of the relevant possession in any of the 3 tax years immediately preceding your move.
• In the year of the move, you do not have a tax home outside the relevant possession or a closer connection to the United States or a foreign country than to the relevant possession during any of the last 183 days of the tax year.
• You are a bona fide resident of the relevant possession for each of the 3 tax years immediately following your move.

Dwight Wood, a U.S. citizen, files returns on a calendar year basis. He lived in the United States from January 2006 through May 2011. In June 2011 he moved to the USVI, purchased a house, and accepted a permanent job with a local employer. From July 1 through December 31, 2011 (more than 183 days), Dwight's principal place of business was in the USVI and, during that time, he did not have a closer connection to the United States or a foreign country than to the USVI. If he is a bona fide resident of the USVI during all of 2012 through 2014, he will satisfy the tax home and closer connection tests for 2011. If Dwight also satisfies the presence test in 2011, he will be considered a bona fide resident of the USVI for the entire 2011 tax year.

In the year you cease to be a bona fide resident of American Samoa, the CNMI, Guam, or the USVI, you will satisfy the tax home and closer connection tests with respect to the relevant possession if you meet all of the following.

• You have been a bona fide resident of the relevant possession for each of the 3 tax years immediately preceding your change of residence.
• In the year of the move, you do not have a tax home outside the relevant possession or a closer connection to the United States or a foreign country than to the relevant possession during any of the first 183 days of the tax year.
• You are not a bona fide resident of the relevant possession for any of the 3 tax years immediately following your move.

Jean Aspen, a U.S. citizen, files returns on a calendar year basis. From January 2008 through December 2010, Jean was a bona fide resident of American Samoa. Jean continued to live there until September 6, 2011, when she accepted new employment and moved to Hawaii. Jean's principal place of business from January 1 through September 5, 2011 (more than 183 days), was in American Samoa, and during that period Jean did not have a closer connection to the United States or a foreign country than to American Samoa. If Jean continues to live and work in Hawaii for the rest of 2011 and throughout years 2012 through 2014, she will satisfy the tax home and closer connection tests for 2011 with respect to American Samoa. If Jean also satisfies the presence test in 2011, she will be considered a bona fide resident for the entire 2011 tax year.

You will be considered a bona fide resident of Puerto Rico for the part of the tax year preceding the date on which you move if you:

• Are a U.S. citizen,
• Are a bona fide resident of Puerto Rico for at least 2 tax years immediately preceding the tax year of the move,
• Cease to be a bona fide resident of Puerto Rico during the tax year,
• Cease to have a tax home in Puerto Rico during the tax year, and
• Have a closer connection to Puerto Rico than to the United States or a foreign country throughout the part of the tax year preceding the date on which you cease to have a tax home in Puerto Rico.

Randy White, a U.S. citizen, files returns on a calendar year basis. For all of 2009 and 2010, Randy was a bona fide resident of Puerto Rico. From January through April 2011, Randy continued to reside and maintain his principal place of business in and closer connection to Puerto Rico. On May 5, 2011, Randy moved and changed his tax home to Nevada. Later that year he established a closer connection to the United States than to Puerto Rico. Randy did not satisfy the presence test for 2011 with respect to Puerto Rico, nor the tax home or closer connection tests. However, because Randy was a bona fide resident of Puerto Rico for at least 2 tax years before he moved to Nevada in 2011, he was a bona fide resident of Puerto Rico from January 1 through May 4, 2011.