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jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3159
Experience:  I've prepared all types of taxes since 1987.
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I am a US resident. MY mother passed awy in 2006 and me ...

Resolved Question:

I am a US resident. My mother passed awy in 2006 and I and my brother inhereted an appartment and land in Romania that worth approx. 200k. What are the tax implications if we sell the properties and transfer it to our US bank accounts?
Submitted: 8 years ago.
Category: Tax
Expert:  jgordosea replied 8 years ago.


Residents and citizens of the United States pay income tax on worldwide income. You will report the gain on the sale of the property on 4797

You may also need to report the rental income (after her death) on Form 1040 (Schedule E) . That may have been true for 2006 as well as 2007 depending on when you inherited the property.

According to Article 6 of the Tax Treaty with Romania the sale of "immovable property" may be taxed by Romania as well as the United States. Income tax paid to Romania will be eligible for the foreign tax credit on Form 1116 .

Best regards.

Customer: replied 8 years ago.
Reply to John Gordos EA's Post: My tax acountant told me that up to 1000k inheritance is not taxable by IRS.
Expert:  jgordosea replied 8 years ago.

Hello again,

The value at the date of death of the property you inherit is not taxable, your accountant is correct.

The income from the property is taxable, once you are the owner.

Any gain from increase in value after you inherited is taxable. Your cost for selling is the value of the property at the date of death.

I hope this helps to clarify for you.

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