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My mother living overseas and NOT a US citizen made a gift

Customer Question
to my brother and me...
My mother living overseas and NOT a US citizen made a gift to my brother and me in form of her house. (my mother is now living in a nursing home). We sold the house now. I have to pay capital gain tax of 25% in Switzerald
JA: The Accountant will know how to help. Is there anything else important you think the Accountant should know?
Customer: Continuing....
Submitted: 1 year ago.Category: Tax
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Answered in 5 minutes by:
8/24/2016
Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago
Mark Taylor
Mark Taylor, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2,325
Experience: Certified Public Accountant
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Hi, my name is Mark. I will be happy to help you with your questions.

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Tax Professional: Robin D., Senior Tax Advisor 4 replied 1 year ago
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15,875
Experience: 15years with H & R Block. Divisional leader, Instructor
Verified

Hello

I am a different expert.

If you are a US person then you will report the sell of the gifted property on your US return and you will be taxed in Switzerland on the sell.

You can use the form 1116 to claim a credit for the taxes you pay in Switzerland when you file your US return. This protects you from being taxed twice.

You will pay tax in the US on any gain. Gain is the difference in BASIS plus improvements and the sale amount less costs to sell. Your BASIS is the same as your mother's because this was a gift and there is no stepping up to fair market value for a gift unfortunately.

Because this house was given to you and your brother you report half and he reports half of the BASIS and the sale price.

Please let me know if you need clarification. If you do not then a positive rating is appreciated so I get credit for the response. (look for the STARS or SMILEY FACES)

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Robin D.
Robin D.
Robin D., Senior Tax Advisor 4
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