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

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owned a garage in South...
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
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Answered in 10 minutes by:
2/1/2009
Tax Professional: Merlo, Accountant replied 8 years ago
Merlo
Merlo, Accountant
Category: Tax
Satisfied Customers: 9,783
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad
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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
Merlo, Accountant
Category: Tax
Satisfied Customers: 9,783
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad
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