Have a Tax Question? Ask a Tax Expert
Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.
I'm sorry, but your requested professional is not online. However, I would love to help you.
On this transaction, you sold a house which is a capital asset. You would have to pay tax on the difference between the value of the house on the date of death of your mother and your selling price.
If you sold the house shortly after you inherited it, and there was no gain, then there is no tax on the amount.
However, if the proceeds were placed into an account in your name for more than $10,000 you will have to file form TDF 90.22-1. This is called the FBAR report, and it just declares to the US any foreign bank accounts you have with over $10,000 at any one time during the year.
You don't have to move your money as a gift to your husband - you can move it to yourself. There will still be no additional tax.
However, there's also no tax if you move it to your husband.
So, you pay no tax when you initially inherit the home. Then, you pay tax when you sell it - but only to the extent that the sales price exceeds the inheritance value (which is the value of the house on the date of death).
When you transfer the money you can transfer it to yourself or your husband...it doesn't matter - there's no additional tax
You will have to report your foreign bank account on the FBAR report.
That should be all for this particular transaction.
Is there anything else that you need assistance with today?
ok, thank you. My mom passed away in Jan 2013. I sold the house in Sep 2013. There is no any taxes in Ukraine when I sold the house because it's inheritance from my mom who was my 1st relatives. I sold it for $45K and it's on my account in Ukraine right now. So what would you suggest doing for me as the best option. So as I understand I can transfer the just $10K per year to my own account here w/o paying any taxes, right?
No, you can transfer 100% of the $45,000 without paying additional tax. But, you have to pay tax on the difference between the house value in January and the house value in September
It should be about the same, so you should have minimal tax
You can't avoid that tax by gifting the proceeds.
But, you have to disclose that you have a bank account with over $10,000 in it -- there's no tax, it's just information reporting
ok, but who could tell me how much $$ cost the house in Jan? And should I pay this minimum tax here or in Ukraine?
The min tax would be here in the US, and you would have to have an appraisal of the house. I don't know how they value homes in Ukraine.
Whatever similar homes were selling for in January would be the value.
Chances are that the value did not fluctuate
ok but it's unclear for me who can give me the appraisal of the house in Jan. I know in Ukraine they did appraisal just before I sold it in Sep.
I'm not certain either. If property values have remained flat, you can assume that there was no gain
and also who will ask me here how did I get the $45K if I don't pay any taxes when I move it here?
You're going to report the transaction on your tax return, it's just that there is no gain. YOu will show you received $45,000 but then you had a basis of $45,000 so you have no taxable gain.
No one is going to ask you where the money came from
ok, so it's very easy as I see, right? so I move to my own account, then I fill out form TDF 90.22-1 next year with this info and that's it, right?
On your tax return, on schedule D you will show the sale of the house with no gain.
The TDF 90.22-1 is an informational report disclosing that you had a bank account overseas with over $10,000 in it
ok. thank you. now I see. I never did taxes myself before so I asked a lot of stupid questions, sorry...
You did not ask one stupid question. YOu asked very good questions.
Is there anything else I can assist you with today?
and thank you. and one more. If I decide to buy a house using these $45K this year will it be another line in taxes next year?
or you suggest to do it next year? or it doesn't matter?
You never have to disclose when you purchase an asset
only when you sell it
ok, I see
Is there anything else I can help you with today?
no it's fine everything. the trouble is Ukraine doesn't allow to move money to yourself. just from 1st relatives. that's why I asked about moving to my husband. it's crazy country
Well, thankfully the US is a little different.
yep with obamacare
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