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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7252
Experience:  15years with H & R Block. Divisional leader, Instructor
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Hi there. I have a question, I have a Puerto Rico Foreign

Resolved Question:

Hi there.
I have a question, I have a Puerto Rico Foreign Corporation and has properties in Miami. I'm selling the properties and will like to know what will be the percentage in capital gain tax.Do i have to pay the taxes to US government or Puerto Rican government?
Are there any other taxes involved?
Thanks
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.

Robin D :

Hello and thank you for using Just Answer,
The sale of the real property and the US taxation is dependent on the location of the property. Because the real property is located in the US, the corporation will pay tax in the US on any gain form the sale.
The rule states that income is not possession source income if, under the rules of Internal Revenue Code sections 861–865, it is treated as income:





  • From sources within the United States, or




  • Effectively connected with the conduct of a trade or business within the United States.





 

Robin D :

Real property includes land and buildings, and generally anything built on, growing on, or attached to land. The location of the property generally determines the source of income from the sale. For example, if you are a bona fide resident of PR and sell your property that is located in PR, the gain on the sale is sourced in PR. If, however, the property you sold was located in the United States, the gain is U.S. source income.

Customer:

Dear Robin D.

Robin D :

Yes?

Robin D :

Did you need to respond?

Customer:

Thanks for your answer, but still don't know what will be the tax percentage to be pay for a Foreign Corporation for selling a property in Miami, Florida. Is it a 15%, or 20% or any other?

Customer:

Thanks

Robin D :

There will be withholding of 10% on the total sales price.

Robin D :

Then the corp will need to file a return as a foreign seller and the difference in cost and sale will determine the gain/loss

Customer:

But do you know what is the percentage ?

Robin D :

The rate would be 15% on any gain

Robin D :

You will be afforded a tax credit in PR though on the tax paid to the US

Customer:

ok, thanks so much.

Robin D :

You are most welcome

Robin D :

Your positive rating is always thanks enough.

Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7252
Experience: 15years with H & R Block. Divisional leader, Instructor
Robin D. and 6 other Tax Specialists are ready to help you
Customer: replied 1 year ago.

Hi.


When you sell a property in Miami, Florida. Who is supposed to pay for the expenses, like closing costs. etc.?


Thanks

Expert:  Robin D. replied 1 year ago.
Well that is not really a tax question. Here is a link to a site though that breaks down costs:
http://www.michaelsaunders.com/msc-title/typical-closing-costs.aspx

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