Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

If a US citizen sells investment property owned in Mexico,

Customer Question
are taxes due in both...
If a US citizen sells investment property owned in Mexico, are taxes due in both the US and Mexico on the profit (original cost about $20k and selling cost about $50k). Also, are some costs deductible (e.g., travel to maintain the property, improvement costs, etc...)? Thank you for your assistance. The owners are retired and their only income is from US Social Security (about $29k combined) and they are over 70 years old.
Submitted: 2 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 4 minutes by:
2/27/2016
Tax Professional: Lev, Tax Advisor replied 2 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,857
Experience: Taxes, Immigration, Labor Relations
Verified

First of all - if the same income is taxed in the US and abroad - the taxpayer may claim a foreign tax credit.

- to determine the amount of credit - the person should use the form 1116 and attach it to the tax return. - http://www.irs.gov/pub/irs-pdf/f1116.pdf

Here are instructions -

http://www.irs.gov/pub/irs-pdf/i1116.pdf

On your tax return - form 1040 -

http://www.irs.gov/pub/irs-pdf/f1040.pdf

the credit is reported on the line 48.

.

If the taxpayer travel to complete the sale transaction - these are selling expenses and deductible.

Ask Your Own Tax Question
Tax Professional: Lev, Tax Advisor replied 2 years ago

travels to maintain the property in prior years are deducted in those years,

The cost of improvement is added to the basis and depreciated.

But we need to be clear if that is a rental property?

Ask Your Own Tax Question
Customer reply replied 2 years ago
The property that is being sold is vacant and and not used for rental purposes.
Tax Professional: Lev, Tax Advisor replied 2 years ago

Then - you definitely may add improvement expenses to the basis.

Ask Your Own Tax Question
Tax Professional: Lev, Tax Advisor replied 2 years ago

Repair and maintenance expenses may be deducted as investment expenses every year they are paid.

As the property was vacant - you might want to keep documentary proof that the property was NOT used as personal by you or your family members.

You would need that if the IRS will question deduction of investment expenses.

.

I appreciate if you take a moment to rate the answer.
Experts are ONLY credited when answers are rated positively.
If you still have any doubts, need clarification - please be sure to ask.
I am here to help you with all tax related issues.

Ask Your Own Tax Question
Was this answer helpful?
Ask Lev Your Own Question
Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,857
32,857 Satisfied Customers
Experience: Taxes, Immigration, Labor Relations

Lev is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,495 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,272 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
Tax question. Married Couple sells their rental property (a
Tax question. Married Couple sells their rental property (a single condominium) for a gain. They file separately and live together. Over the years they have realized Schedule E losses but could not ta… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,232 satisfied customers
A HOUSE WAS INHERITED AND USED AS RENTAL PROPERTY FOR 2
A HOUSE WAS INHERITED AND USED AS RENTAL PROPERTY FOR 2 YEARS THEN THE NEXT 2 YEARS IT WAS HELD FOR INVESTMENT AND IMPROVEMENTS MADE TO BE SOLD. HOW TO REPORT THE SALE (IT WAS A GAIN) AND RECAPTURE TH… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,232 satisfied customers
I personally own 25 rental properties and was told to divide
I personally own 25 rental properties and was told to divide them up into maybe 8 LLC's with my children having a fractional interest. This would provide me the best protection from creditors getting … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I have three rental properties and they are separate
I have three rental properties and they are separate activities for tax purposes. There are suspended passive losses on each one. I sold one of them last year with capital gain. I know that the suspen… read more
taxmanrog
taxmanrog
Master\u0027s Degree
941 satisfied customers
The federal government gives you a tax credit for foreign
The federal government gives you a tax credit for foreign taxes paid in another country Does New York State offer a tax credit for the same If yes , where would it be found, on what form… read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,119 satisfied customers
Filed form 1040 form took the standard deduction, I am now
filed form 1040 form took the standard deduction, I am now filing the new york state, … read more
Lev
Lev
Tax Advisor
32,857 satisfied customers
On form 1040, line 27, what is the deductible part of the
On form 1040, line 27, what is the deductible part of the self-employment tax requiring schedule SE?… read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,119 satisfied customers
Lev. I have a question regarding line 2 of Form 1116 for
Hi Lev. I have a question regarding line 2 of Form 1116 for expenses definitely related to passive rental income. On a year in which the depreciation and other expenses exceed the total income - and t… read more
Lev
Lev
Tax Advisor
32,857 satisfied customers
Are property taxes on a first and second home tax deductible
Are property taxes on a first and second home tax deductible in the same year on schedule A?… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Tax Question. Taxpayer has rental property and sustains
Tax Question. Taxpayer has rental property and sustains flood casualty loss. His expenses to repair exceed the insurance payments. If this is reported on Form 4684 does this properly flow to the 1040,… read more
Lev
Lev
Tax Advisor
32,857 satisfied customers
Taxpayer used second home as a rental property in 2016. Due
Taxpayer used second home as a rental property in 2016. Due to high AGI, he was not able to claim Schedule E operating expense loss of $8K and depreciation of $11K in 2016. In the middle of 2017, he s… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,232 satisfied customers
Can airfare be deducted for a schedule e rental property if
Can airfare be deducted for a schedule e rental property if it was to go and perform maintenance on the property? If so where on schedule e should it be deducted?… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Tax Question: If I own a rental property that was converted
Tax Question: If I own a rental property that was converted from personal use, when I sell the property, can I use the personal use as the basis. Please provide IRS references.… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,272 satisfied customers
Selling a rental property and using it in an 1031 exchange
Selling a rental property and using it in an 1031 exchange to buy house for my sons family to live in. They will qualify for the loan and go on title.Question is the property still a rental property a… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,232 satisfied customers
I want to ask a question about Income tax return form 1040..
Hello I want to ask a question about Income tax return form 1040.. I want to fill form but My wife doesnt have any ssn number. She is housewife and she has no income. Which option should I choose from… read more
James Daloisio
James Daloisio
Attorney
Doctoral Degree
232 satisfied customers
If I move my rental properties from my personal return to a
If I move my rental properties from my personal return to a 1065 partnership, how is the basis calculated?… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,232 satisfied customers
Are funeral expenses deductible on IRS personal return? My
Are funeral expenses deductible on IRS personal return? … read more
Lev
Lev
Tax Advisor
32,857 satisfied customers
If I donate a rental property to charity can I deducted the
If I donate a rental property to charity can I deducted the fair market value? If yes How old can my professional appraiser report be? … read more
Mark D
Mark D
Enrolled Agent
Master's Degree
1,338 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x