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Shawn P Adamo
Shawn P Adamo, Retired CPA
Category: Tax
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Experience:  Retired CPA
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I have dual citizenship. US and Mexico. I mostly reside in

Resolved Question:

I have dual citizenship. US and Mexico. I mostly reside in Mexico but I have most of my paperwork and records in the U.S. I just obtained a property in mexico at a value of roughly $600k. I want to know if I need to report this on my taxes in hte U.S.? I know I will need to pay taxes in mexico but I do not want to have to pay in the U.S.? I am a student in Mexico and the property I obtained will be placed in my name by my grandfather. Will I have to pay taxes on this in the U.S. ? Do I even have to disclose this ownership?
Submitted: 2 years ago.
Category: Tax
Expert:  Shawn P Adamo replied 2 years ago.

Shawn P Adamo :

Hello. My specialty is focusing on YOUR Financial needs. Financial Planner/Business Owner for 20 years. CPA,PFS,QFP,GMMA.

Shawn P Adamo :

There is no need to "report" the purchase on your US taxes nor take a credit for Mexican taxes paid.

Shawn P Adamo :

This asset should be included in your estate for US estate tax calculations.

Shawn P Adamo :

In addition if you ever sell it and have a gain it should be reported to the IRS.

Shawn P Adamo :

The LEGAL answer is that since you are putting this in your grandfathers name you'll have no ownership (owner of record).

Shawn P Adamo :

If granpa dies you can get a step up in basis, but should report this if you sell.

Shawn P Adamo :

Hello from NJ

Shawn P Adamo :

Please join me.

Customer :
Shawn P Adamo :

For now you have NO issues (though you should report this when you file taxes as a gift). it will reduce your estate tax credit when you die.

Shawn P Adamo :

The IRS will consider this 600,000 as being 'moved" to avoid paying estate taxes.

Customer :

well the property is actually going to be in my name. NOt my grandfathers. Essentially, my grandfather will be purchasing it and putting it in my name.


 

Customer :

My grandfather is a Mexican national.


 

Shawn P Adamo :

but you said the property will be placed in his name?

Shawn P Adamo :

sorry. i misread

Shawn P Adamo :

then no worries. Eventually you'll include this in your estate of if you sell at a gain or loss you should report that.

Customer :

ok. I am just trying to figure out what needs to be reported and how in teh US.

Shawn P Adamo :

nothing for now.

Shawn P Adamo :

UPON sale, the gain or loss.

Customer :

so r u saying that when I file paperwork with the IRS..i should not include it? Or when I do my taxes I dont need to disclose?


 

Shawn P Adamo :

UPON YOUR death, it's to be included in the estate

Shawn P Adamo :

do NOTHING with the IRS. there is NO NEED

Customer :

Ok. that is what I thought. THank you.

Customer :
Shawn P Adamo :

There is no sense even mentioning it until sold or dead.

Customer :

any entity to whom I need to report it in the U.S.? As i mentioned I know I have to pay some tax in mexico.

Shawn P Adamo :

Pay Mexico.

Shawn P Adamo :

When you sell or die you'll use the IRS forms.

Shawn P Adamo :

You'll file for capital gains.loss or the estate will file a return

Customer :
Shawn P Adamo :

I'll stay here if you have an y further questions

Customer :

awesome. thanks for the clarification.


 

Shawn P Adamo :

NP. Enjoy!!!

Shawn P Adamo :

I'll leave you to accept and post feedback.

Customer :

now I have a different sort of question. how Can I get you to anser in order to give you credit on the new question?

Shawn P Adamo :

Just ask. No need to pay again. i'm here to try and help

Shawn P Adamo :

You'll get two answers for the whopping single fee. LOL

Shawn P Adamo :

Ask away

Customer :
Shawn P Adamo :

??

Customer :

LOL. well in regards XXXXX XXXXX mexican national owning property in the U.S. as long as they are paying property taxes..does the mexican national have to pay any taxes? DOes he have to file IRS forms? He doesnt work in the U.S.


 

Shawn P Adamo :

Nope. As long as the mexican National pays the property taxes there are no issues.

Shawn P Adamo :

UNLESS he sells it and has a gain or loss. Upon his death there MAY be estate taxes

Customer :

If he has bank accounts in the us...with money..any other issues of reporting?

Shawn P Adamo :

Till then we just ride along peacefully

Customer :

ok.


 

Shawn P Adamo :

yes. if he has interest he must file a 1040NR

Shawn P Adamo :

I say "he should file"

Shawn P Adamo :

some folks don't

Customer :

Ok. bc..i think it may be minimal...but I think he has an account that has been in the U.S> for over 20 years..


 

Shawn P Adamo :

The IRS and Homeland Security are on this because of m0ney laundering

Customer :

ok...if in the future I have questions...do I just request you?


 

Shawn P Adamo :

Please feel free to so so. Shawn Adamo

Customer :
Shawn P Adamo, Retired CPA
Category: Tax
Satisfied Customers: 1279
Experience: Retired CPA
Shawn P Adamo and 6 other Tax Specialists are ready to help you
Expert:  Robin D. replied 2 years ago.
HelloI am a different tax expert and offer you the following information about your situation. Based on the information you supplied in your first post and the additional information you posted in the CHAT:A nonresident alien (NRA) usually is subject to U.S. income tax only on U.S. source income. The grandfather would not be required to report interest earned because that interest is taxed in the resident country.The grandfather is purchasing the property and placing it in the name of the grandson, this would be a gift under the tax laws. Because it is over the limit ($100,000) for gifts from non US persons to a US person, the grandson would need to report the GIFT on Form 3520. There would be no tax to pay by the grandson but reporting would be required.I hope you find this information helpful and relative to your tax requirements.

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