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T Perrin C
T Perrin C, Consultant: information en droit du travail
Category: French Law
Satisfied Customers: 1412
Experience:  8 years as a Senior judge at Paris Conseil de Prud'hommes (Paris Industrial Tribunal)
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What are the capital gains tax implications for an American

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What are the capital gains tax implications for an American limited partnership selling a French property it has owned for 22 years. There are two parties each owning 50% of the shares who are unrelated and have shared the house. WHo should we contact for advice on timing and structuring the transaction. Fenno, Philadelphia, PA
From the information above: 44% of the capital gains of the transaction will be exempted from tax. The remaining 56% will be taxed at a 34,5% rate. If the overall capital gains are over 50K€, an additional progressive contribution of up to 2% is levied.
A notaire will give you all the necessary information. Chances are conditions will be worsening in the coming months.
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Customer: replied 4 years ago.

We have not made any arrangement yet to sell the property - would there be a tax if one American partner sold shares to the other American partner and the association does not sell the property at this time.

Does it make a difference if the property or the shares are sold to an American as opposed to a French citizen? Fenno

In the first case this would not concern French tax authorities if both partners are American residents and only the name of the limited partnership appears on the deeds. Maybe US tax authorities would tax such a transaction...
If the shares were sold to an American resident (and not citizen) this would also concern US tax authorities.

Yet, once the partnership sells the property and the deeds are modified, full CGT will be owed. Thus the buyer of the shares also buys a sleeping tax debt...