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socrateaser, Lawyer
Category: Tax
Satisfied Customers: 38906
Experience:  Retired (mostly)
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Do I have to pay tax in US on the profit I made, after expenses

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Do I have to pay tax in US on the profit I made, after expenses on property sold in New Zealand. I am a US citizen and live in US
U.S. citizens are taxed on their income from all sources earned worldwide. If you had a profit on a property sold in NZ, then you must pay capital gains tax on that property, no different than if the property.

The US-NZ Tax Treaty, Article 13 permits the NZ authorities to tax the capital gains in NZ. However, the IRS will also tax the capital gain, but you are entitled to a foreign tax credit for the tax paid in NZ. This will reduce your net tax to no more than what you would have owed had the property been located in the USA.

Please let me know if my answer is helpful, or if I can provide further clarification or assistance.

And, thanks for using!
Customer: replied 3 years ago.

New Zealand does not have capital gains tax on property, so therefore there is only the US tax after expenses. I was just on the NZ website to clarify this.

Please review this guide (scroll to page 5) from the NZ tax authorities. It indicates that where a person purchases property with the intent to make a profit, that the profit is taxable. Consequently, NZ does in fact have a capital gains tax, which may apply to your circumstances.


I hope that you will reconsider your previous rating and provide a positive rating of my services.


Thanks in advance.

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