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Merlo
Merlo, Accountant
Category: Tax
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Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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I am a widow whose husband was from Peru, South America. He

Resolved Question:

I am a widow whose husband was from Peru, South America. He owned a garage in South America and I am about to sell it. I am American and now live in the States. I will pay taxes in South America on the sale but do I have to pay them here in the states on money brought back?
Submitted: 5 years ago.
Category: Tax
Expert:  Merlo replied 5 years ago.
HelloCustomer

As a US citizen, you are subject to tax on any income you have worldwide. I assume that this property in South America was left to you when your husband died, and so the property is now legally yours to sell, and so you will be the one who keeps the profits.

You will have to file a tax return with the IRS and report the profit from this sale, however, at the same time you can claim a foreign tax credit for the tax you paid to South America. This will help prevent double taxation on the same income. Here is a link to the IRS discussion of the foreign tax credit which you may claim.

http://www.irs.gov/businesses/article/0,,id=183263,00.html

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Thank you.

Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad
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