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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 11585
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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The Accountant will know how to help. Please tell me more,

Customer Question

Hi Good morning My name is Sanjay
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: Ok Here is my question I have moved to the USA around 18 months ago. I am in USA on work visa. Prior to coming into USA - I have property in India (where I used to reside) I understand that sale of property in India is now taxable for me in USA (as I am now a US resident) However, I have also read that there is a DTAA (Double taxation avoidance agreement) between India and USA and as per that agreement - sale of property is taxable in the country of origin. So if I sell my property in India - it will be subjected to tax in India as per laws in India and with the DTAA - there will no additional tax on it in the USA. Can you please let me know if my understanding is correct?
JA: Is there anything else the Accountant should be aware of?
Customer: Yes - I have already declared all my foreign income for the 2015 tax year. It was really difficult process for me - but I have complied with the law
Submitted: 7 months ago.
Category: Tax
Expert:  Lane replied 7 months ago.

Hi. ... Looks like no one's picking this up ... I can help .. My name's Lane

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I hold a law degree, with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, on three continents, since 1986.

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Please bear with me a moment while I prepare your answer...

Expert:  Lane replied 7 months ago.

To calculate your U.S. tax liability for this sale, you'll need to determine the current American tax rate on long-term capital gains.

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In accordance with the double-taxation treaty, you'll be able to subtract the total amount of Indian taxes for which you were liable from your expected American tax liability.

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So whether or not there is any NET additional tax depends on the tax you paid in India (20 percent, I believe?) and the amount the tax would be in the US.

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In the US, long-term gains and qualified dividends taxed at

  • 0% if taxable income falls in the 10% or 15% marginal tax brackets
  • 15% if taxable income falls in the 25%, 28%, 33%, or 35% marginal tax brackets
  • 20% if taxable income falls in the 39.6% marginal tax bracket
Expert:  Lane replied 7 months ago.

Please let me know if you have any questions at all, before rating me

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If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit") ... Otherwise I receive no compensation from JustAnswer for the work here.

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Thank you!

Lane

I hold a law degree, with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986.