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Is a sale of land in panama taxable to a united states

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is a sale of land in panama taxable to a united states resident?
Submitted: 9 years ago.Category: Tax
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1/3/2008
Tax Professional: RD, Certified Public Accountant (CPA) replied 9 years ago
RD
RD, Certified Public Accountant (CPA)
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Being a US resident- your world wide income is taxable in US unless you are covered under the double tax avoidance tax treaties(but US and Panama do not have such a tax treaty).

You will owe tax on the gain on sale of land. However you will get a credit (foreign tax credit) for taxes paid to Panama on this gain. So if the gain is long term capital gain and your tax liability in Panama was more than 15%, than in most cases you will not owe any tax in US on the gain as the tax will be offset by the foreign tax credit.

Let me know if you have any question. Bonus and Feedback will be highly appreciated!!!

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

RD
RD, Certified Public Accountant (CPA)
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