Hello,
For the purpose of simplicity, I’m using all amounts in USD.
I recently sold empty land (not farm land, property land but never built a house) in a foreign country and money is deposited to my foreign account in foreign currency.
The sale value is $70K and of which the original investment is $20K. I have been told that I need to pay long term capital gain taxes on $50K in the foreign country, which I’ll do. Let’s say that’s 15% tax.
For US, I’ll file FBAR this year and maybe also form 8938 because the amount is more than $50K based on IRS rules. If I want to bring (repatriate) that $70K to US, how is this money treated? It is not foreign earned income because it’s not rents, dividends, interest etc. Is it considered foreign income and if so, do I owe according to my tax bracket (35%+5%)? Also, do I need to pay tax on 70K? Or $50K (excluding investment of $20K)? Or on $59.5K ($70K minus 15% foreign tax paid)?
My current CPA is not familiar with foreign tax laws and posting here while I get a recommendation.
Thank you!
For the purpose of simplicity, I’m using all amounts in USD.
I recently sold empty land (not farm land, property land but never built a house) in a foreign country and money is deposited to my foreign account in foreign currency.
The sale value is $70K and of which the original investment is $20K. I have been told that I need to pay long term capital gain taxes on $50K in the foreign country, which I’ll do. Let’s say that’s 15% tax.
For US, I’ll file FBAR this year and maybe also form 8938 because the amount is more than $50K based on IRS rules. If I want to bring (repatriate) that $70K to US, how is this money treated? It is not foreign earned income because it’s not rents, dividends, interest etc. Is it considered foreign income and if so, do I owe according to my tax bracket (35%+5%)? Also, do I need to pay tax on 70K? Or $50K (excluding investment of $20K)? Or on $59.5K ($70K minus 15% foreign tax paid)?
My current CPA is not familiar with foreign tax laws and posting here while I get a recommendation.
Thank you!
Statistics: Posted by nrkv — Wed Sep 04, 2024 6:29 am — Replies 2 — Views 278