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Question

Hi, my wife just receive cash from the sale of a condo she inherited 20 years Ago from her grandmother. The condo was in Poland. My wife has lived in cLifornia for 20 yeArs and has been a us citizen for ten years. Do we owe taxes on this cash? Thanks

Submitted: 33 days and 6 hours ago.
Category: Tax
Value: $30
Status: CLOSED
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State/Country relating to question: California

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Posted by Mark D 33 days and 6 hours ago.

Answer

XXXXXXXXXX,

You would have a capital gain for the difference in price the condo sold for and the fair market value at time of inheritance. This would be treated as a long-term capital gain on Schedule D. You would get a foreign tax credit at the IRS level for any foreign taxes paid (generally dollar for dollar) to Poland on this same sale. Please let me know if you have further questions.

Regards,

XXXX X

33 days and 6 hours ago.

Reply

Thanks, is there anywhere we can put this money to avoid or reduce taxes such as another home? Also , is there a limit on taxes (maybe 15 percent inheritance tax). Where can I get a fair valuation. BecaUSe of the poor value of polish currency 20 years ago it was virtuAlly worthless in us dollars at the time of inheritance. Thanks

Accepted Answer

Kenton,

Buying another home will not generally give you a large up front tax benefit. The maximum rate on long-term capital gains is 15% (no inheritance tax). The valuation would indeed be difficult. I would suggest you use public records to estimate a value (in dollars). There are many actions you can take to lower your tax burden. Every taxpayer's situation is different and really requires at specific look at personal details. I would suggest you contact a local tax professional to discuss options available to you.

Regards,

XXXX X

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Expert: Mark D
Pos. Feedback: 99.6 %
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Answered: 10/20/2009

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MBA, CTEC Registered, CPA Firm Experience with Business and Individual Tax Returns and Issues

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