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Hi ,I`m planning on selling a land i received as inheritance from my father.The land is located in Colombia and was considered worthless up to some years ago(permits changed) but it appreciated significantly and i got some decent proposals . The sale price is about 200k-250k
I`m a US citizen living abroad for the last 4 years and I`m planning on transferring the money in a US account in Florida .So here are my questions :
1. How much would the maximum tax be for Florida?
2. Any exceptions i can claim?Married with one kid.
3. What documents will the IRS need from me as a proof of this transfer? ?
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When you inherit property, such as a home, or land as in your case, the basis of the land is the Fair Market Value on the date of death,
This is important since you will only pay tax on the DIFFERENCE between your cost basis (Fair Market Value) and the $ of the sale.
welcome to the chat
ok.......before I answer your individual questions, let me be sure I give you some information that may help bridge the gap between your cost basis (Fair Market Value) and the selling price
Hopefully the value of the land was in the person's will. If not, then his/her attorney, or the executor or the will should have that value
I do not know if you have to pay land taxes in Columbia like you do here, but if you did, and you did not deduct them on your Schedue A itemized deductions, then you may add those taxes to the basis of the land
Just as you will do for any improvements made to the land, and the cost of selling the land.
. How much would the maximum tax be for Florida?
A-0% There is no individual income tax in Florida
Any exceptions i can claim?Married with one kid.
There are many ways to help reduce your overall tax.......Start a college fund for your child, if you haven' t already purchased a home, you may want to look in to that. Give to charity
None of these help with the capital gains tax in Columbia , but if you can itemize deductions, that helps your overall tax
What documents will the IRS need from me as a proof of this transfer? ?
I'm sure that Columbia will send you some kind of form showing the sale......
you will report the sale of Form 8949 which will eventually bring the sale to Schedule D
The good new is that your Capital Gains tax is capped at 23.8%, however, depending on the rest of your income, you may never get to 23.8
It's quite possible that you will be in the 15%-18% capital gains
Hi Anne ,Thank you.So what are the steps after the land sale .Fill up form 8949 and then Schedule D?
Further, if you have to pay Columbia tax on the sale of the property, you may apply for a credit by filing
do you have all of the numbers you need?
Emm i think i do .Im not sure about the cost basis-fair value of the land though.
It should be mentioned on the title most probably
Anything else ,any other forms i need to be aware of?
I don't think so..........but let me check that just to be sure
thank you. About the cost basis of the land,what documents are acceptable?
No, it does not appear that you need to file any other forms than the ones already listed above
As to your question re: what forms are acceptable........actually any form that gives you the information is acceptable
Remember, you are not sending those forms to the IRS with your return
You will hold on to those forms JUST IN CASE the IRS asks for them
and even then, the IRS will know that the forms will be different since they are generated in another country
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