Selling property overseas
 

Hi all, long time lurker on this forum but need to ask a question and hoping you knowledgable folks can help! Currently doing the US 2018 tax return (such fun) and wanted to query something:

Have been living in the USA as a resident alien since 2017. My name was transferred in 2015/16 to be the joint owner of a family property in Europe, my stake in this property is worth around 50k Euros.

Family is now selling this property and I am wondering in regards to if / when the property is sold:

• If / how I should declare this on my US tax return?
• If it needs to be declared, what will the IRS do with this information?
• What will the criterion be for any tax liability on the 2019 return?

I didn't declare this property in 2017 as I was not aware it was relevant, but now it might be sold, I am not so sure!
So I may need to fill in a tax amendment form or something too..?

Thanks in advance for any info!

Re: Selling property overseas
 

From a US perspective you take on the basis of the person who gave it to you; not the market value on the date received. Your share of the gain is taxed at US tax rates; using spot exchange rates for the basis and the disposal.

Re: Selling property overseas
 

What is the basis on which your name was added to the title? Was it a gift, or was it an inheritance? Or was there some purchase consideration - payment, cancellation of a debt, or exchange of other assets?

Re: Selling property overseas
 

'If it needs to be declared, what will the IRS do with this information?'

Do with it? Probably nothing, although it could come up in an audit if that ever happens.
Low possibility. Not scary unless you are willfully fraudulent.

State your interest in the property, your basis, work out your profit, report and pay any tax due. End of.
Little to be concerned about.

(I was audited recently and, as a result, they sent me a large check. Still can't figure out why, but oh well...:lol:)

Re: Selling property overseas
 

That's helpful to know, thank you for the reply!

Re: Selling property overseas
 

Thanks for your reply! It was given as a gift.

Re: Selling property overseas
 

Good to know, thank you! Wanted to make sure I was doing the right thing.

Nice that you got a large check! It's normally the other way around, enjoy that! :regular_smile:

Re: Selling property overseas
 

OK, so as Cook_Co said, your gain for CGT purposes is calculated based on the donor's acquisition cost. Also if there is CGT on the sale in the country of where the property is located, your share of that will be a credit against US CGT.

Re: Selling property overseas
 

Ok that makes sense, thanks so much!