How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Merlo Your Own Question
Merlo
Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
9573734
Type Your Tax Question Here...
Merlo is online now
A new question is answered every 9 seconds

I am a widow whose husband was from Peru, South America. He

Resolved Question:

I am a widow whose husband was from Peru, South America. He owned a garage in South America and I am about to sell it. I am American and now live in the States. I will pay taxes in South America on the sale but do I have to pay them here in the states on money brought back?
Submitted: 8 years ago.
Category: Tax
Expert:  Merlo replied 8 years ago.
HelloCustomer

As a US citizen, you are subject to tax on any income you have worldwide. I assume that this property in South America was left to you when your husband died, and so the property is now legally yours to sell, and so you will be the one who keeps the profits.

You will have to file a tax return with the IRS and report the profit from this sale, however, at the same time you can claim a foreign tax credit for the tax you paid to South America. This will help prevent double taxation on the same income. Here is a link to the IRS discussion of the foreign tax credit which you may claim.

http://www.irs.gov/businesses/article/0,,id=183263,00.html

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you.

Merlo and 3 other Tax Specialists are ready to help you