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Selling a home outside the US

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  • Selling a home outside the US

    Hi, I have not been able to find good information in regards to selling international properties and tax implications.  I own a home in the country of Colombia, I am selling it for 600K (I own 75% of it and my sister the other 25%). Before I list this property, what do I need to know in regards to taxes and how I can transfer the money to the US without paying more taxes than I need to. A little information about me, I am an anesthesiologist, 5 years out of residency. I don't have any debts or loans. I recently paid my mortgage and I am doing everything I have learned in the WCI. I don't have any taxable accounts or any real money to invest yet. I appreciate any info you can give me or point me in the right direction.

  • #2
    Are you a U.S. citizen or resident alien/green card holder?  Are you a Columbian citizen?

    How did you receive the property? Was it inherited? Did you purchase it?  Do you currently have or previously held a Columbian bank/investment account?  Is the property held in your name or through an entity that you own 75%?

    If this is inherited property or a gift you may need to file or should have filed form 3520 to report the inheritance to the IRS.  No issues with purchasing the property with your own money as long as you have disclosed any foreign bank accounts you've owned or had an interest in that exceeded $10k on a Fin Cen114 (FBAR) and Form 8938 if the account exceeded $50k to $150k (it varies depending on certain situations like being married for example).

    Generally speaking, the U.S. taxes your worldwide income if you are a citizen or resident. So, the difference between what your basis is in the property and what you sell it for will be your gain that you will pay tax on.  You may also have to pay tax to Columbia but I don't know their taxation system.  From my understanding, Columbia does not have an income tax treaty with the U.S. to help prevent double taxation.  I am not an expert in this area but hopefully this can start a conversation or help guide you to finding more information on the internet.  To be honest though, I would try to find a competent CPA who has experience with these types of issues.  I deal with it occasionally but not enough to call myself an expert.