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Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 6245
Experience:  Extensive Experience with Tax, Financial & Estate Issues
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I have a question about tax, who should i ask? NC, No. I

Customer Question

I have a question about tax, who should i ask?
JA: What state are you in? It matters because laws vary by location.
Customer: NC
JA: Has anything been filed or reported?
Customer: No. I have a property oversea. I brought it before I became a US citizen. I am planing to sell it, but don't know if I have to pay tax when I send the money to my bank in the US?
JA: Anything else you want the lawyer to know before I connect you?
Customer: Just want to find a right lawyer for this specific question
Submitted: 4 months ago.
Category: Tax
Expert:  Stephen G. replied 4 months ago.

Hello, my name is***** goal is to give you a complete & accurate answer. I am working on your request now & I will respond as soon as possible.

Expert:  Stephen G. replied 4 months ago.

If you are a US Citizen when you sell the property, it is reportable on your US income tax return for the year of sale.

US citizens are taxed on their worldwide income.

The timing is when the sale is made, not when you transfer the fund to the US.

Steve G.

Customer: replied 4 months ago.
Hi Steve,
I just became a US citizen, but the property I had 16 years ago. Now, I am planing to put it on the market (it isn't sold yet).
So, it sounds like I have to pay income tax? how much is it?
Customer: replied 4 months ago.
I have head from the US embassy employee in my home country that I don't have to pay tax (it is new law) since I had it before I became a US citizen, not sure how accurate the information is
Customer: replied 4 months ago.
have head from the US embassy employee in my home country that I don't have to pay tax (it is new law) since I had it before I became a US citizen, not sure how accurate the information is
Expert:  Stephen G. replied 4 months ago.

I know of no such exception that would apply to US Citizens. Even resident aliens, who are taxed the same as US Citizens, would be taxed on such sales.

The only possibility would be if there is a "tax treaty" provision with the specific country that you are referring to, that could offer such an exemption, but that would require a review of the specific tax treaty between the US & your "home country".

If you give me the name of the country involved, the date you acquired the property, the nature of the property (for example was it your primary residence or was it rental property), and the date you became a US Citizen, I can determine if a further review would be warranted, and if so provide you with an offer to perform a review of any tax treaty between the US and your home country for an additional fee.

The other option that you may wish to explore is to get the specific reference to the law or regulation from whomever provided you with the information that the sale wouldn't be taxed to a US Citizen in your circumstances. Often, these type of statements are made in a confusing manner and don't universally apply to everyone's specific circumstances.

One issue that often works to confuse things is that as a US Citizen, depending upon the country involved, you may be entitled to a credit against your US taxes for any tax paid to your home country on the sale of the property, thus possibly reducing or eliminating the US tax on the sale. Possibly, that could be what the embassy employee was referring to. It is hard to know without a specific reference.

Steve G.