savannah_boy

Hi everyone, I am a legal resident alien (green card holder) since 2010. I was a resident in Spain in 2003 and bought a property with ex wife. Finally sold the property in 2021 (for a loss when I was living in the USA) all through spanish abogado, notary etc and paid relevant spanish taxes. I my received half of the sale funds etc.

The funds are in a spanish bank account which was set up correctly with US SSN and IRS know of the account as I have referenced it before.

Has anyone experience of this?

Not sure how to present this correctly in my US taxes. Do I need translations of the sale?

Thanks in advance!

Glasgow Girl

I would report the sale as normal on your US taxes, using 50% of the cost and sale price if jointly owned, converting the cost and proceeds to USD using the exchange rates on the dates of purchase and sale. You should be able to estimate those by finding historical rates on the internet, or worst case use the publicized IRS rates for the end of the years in which you bought and sold. If you sold at a loss you should have no capital gains to pay. Beware of a foreign currency gain though, it is possible that exchange rate differences could turn your loss into a $ gain. If you do not qualify for the normal exemptions of $500K/$250K married/single because you have not lived in the house for 2 of the past 5 years then there would be tax to pay. Unfortunately you get no benefit from a loss.

If your proceeds were or are in a foreign account and you have not otherwise filed an FBAR to the treasury department and Form 8938 with your taxes then make sure you do so if your balance puts you over the thresholds. Stiff fines and penalties for failing to do so and the deadline is mid April 2022, for the 2021 tax year..

savannah_boy

Thanks for replying! Very useful.