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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16544
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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do you have to pay a tax on property sold in puerto rico

This answer was rated:

do you have to pay a tax on property sold in puerto rico

Megan C :

Thank you for your question, and thanks for using JustAnswer.com

Megan C :

Are you a US citizen or resident? Or are you a resident of Puerto Rico?

Customer:

us citizen father left property to me and i sold it.

Megan C :

Oh so you inherited the property

Megan C :

he did not give it to you during his lifetime?

Customer:

i became part owner while he was alive

Megan C :

Ok ... do you have a gain on the sale?

Customer:

the house was paid off

Megan C :

No, you won't be taxed on the entire sale proceeds. You will only be taxed on the amount that exceeds your basis

Customer:

exceeds basis?

Megan C :

Yes, you are only taxed on the amount that is over what you have invested in the property. Your basis will be calculated by taking your father's basis (what he paid for the asset) for your portion of the property that you got during his life. So, if your father paid $100,000 for the property and gave you half, half your basis is $50,000

Megan C :

Then the other half is the fair market value on the date of death of your father. So, if the property was worth $200,000 at the date of death, the half that you inherited is worth $100,000. Together you have a basis of $150,000

Customer:

thank you for your help

Megan C :

Your welcome. So, if you sold the property for $155,000 you would only have a gain of $5,000

Megan C :

that's all you would be taxed on

Megan C :

and if you are a US citizen/resident you must place this on your US tax return

Megan C :

This is covered in tax topic 901 CLICK HERE and publication 570 CLICK HERE

Customer:

will do

Megan C :

Is there anything else I can assist you with today?

Customer:

no that takes care of my question. thanks again

Megan C :

You're welcome. If you would, please take a moment to rate my response as "excellent" so that I may receive credit for assisting you today

Megan C and other Finance Specialists are ready to help you
Thanks, Gerardo for your positive rating. Please come back and visit me any time you need a question answered. It was a pleasure working with you today!