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Jonathan Tierney
Jonathan Tierney, Certified Public Accountant
Category: Capital Gains and Losses
Satisfied Customers: 322
Experience:  Tax Accountant at Praxair, Inc.
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Do I pay capital gains tax on a property sold in another

Customer Question

Do I pay capital gains tax on a property sold in another country?
Submitted: 1 year ago.
Category: Capital Gains and Losses
Expert:  Jonathan Tierney replied 1 year ago.

Hi, my name is ***** ***** I can help. U.S. citizens' and permanent residents are taxed on their income received worldwide. To report the sale of property not used in a trade or business, use Form 8949 with either box C, for property held less than one year, or box F, for property held for one year or more. Include a description of the property and its location, the amount received for it and your basis in the property. The sale then gets carried over to Schedule D and then Form 1040, line 13 as a capital gain.

If the foreign country taxed you on the gain from the property sale, use Form 1116 to claim the foreign tax credit, which will offset your U.S. tax up to the amount of U.S. tax on the property gain.

I hope this answers your question. Please let me know if I can clarify anything or answer any additional questions.

Thanks, Jonathan