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Anne
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 2396
Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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Inheritance-Land

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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? ?


Anne :

HI

Anne :

Thank you for using using justanswer.

Anne :

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,

Anne :

This is important since you will only pay tax on the DIFFERENCE between your cost basis (Fair Market Value) and the $ of the sale.

Anne :

welcome to the chat

Anne :

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

Anne :

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

Anne :

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

Anne :

Just as you will do for any improvements made to the land, and the cost of selling the land.

Anne :

. How much would the maximum tax be for Florida?

Anne :

A-0% There is no individual income tax in Florida

Anne :

Any exceptions i can claim?Married with one kid.

Anne :

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

Anne :

None of these help with the capital gains tax in Columbia , but if you can itemize deductions, that helps your overall tax

Anne :

What documents will the IRS need from me as a proof of this transfer? ?

Anne :

I'm sure that Columbia will send you some kind of form showing the sale......

Anne :

you will report the sale of Form 8949 which will eventually bring the sale to Schedule D

Anne :

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

Anne :

It's quite possible that you will be in the 15%-18% capital gains

Customer:

Hi Anne ,Thank you.So what are the steps after the land sale .Fill up form 8949 and then Schedule D?

Anne :

Further, if you have to pay Columbia tax on the sale of the property, you may apply for a credit by filing


Form 1116 - Internal Revenue Service


 

Anne :

yes

Anne :

do you have all of the numbers you need?

Customer:

Emm i think i do .Im not sure about the cost basis-fair value of the land though.

Customer:

It should be mentioned on the title most probably

Customer:

Anything else ,any other forms i need to be aware of?

Anne :

I don't think so..........but let me check that just to be sure

Customer:

thank you. About the cost basis of the land,what documents are acceptable?

Anne :

No, it does not appear that you need to file any other forms than the ones already listed above

Anne :

As to your question re: what forms are acceptable........actually any form that gives you the information is acceptable

Anne :

Remember, you are not sending those forms to the IRS with your return

Anne :

You will hold on to those forms JUST IN CASE the IRS asks for them

Anne :

and even then, the IRS will know that the forms will be different since they are generated in another country

Customer: Ok thank you !you been very helpful. Have a nice day
Anne :

You're most welcome

Anne :

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Anne :

You can bookmark this page and come back to it at anytime for follow up questions, even if you do rate/pay

Anne :

You have a nice day also!

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