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If i sell a rental property abroad, how are the capital

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Hi Barbara,If i sell a...
Hi Barbara,If i sell a rental property abroad, how are the capital gains taxes calculated?
I had the property long before i become a US person.Are capital gains calculated from the day of purchase (although at the time i was not a US person) until the time of sell?
Or is it from the time i moved to the US and became a US person until the time of sell?
(Not sure how that would be calculated)
Submitted: 24 days ago.Category: Tax
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Answered in 14 minutes by:
3/28/2018
Tax Professional: Barbara, Enrolled Agent replied 24 days ago
Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 5,778
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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Thank you for requesting me.

The rules are the same for reporting the sale of rental property, whether or not located in the US.

You will pay capital gains tax, if any, on the DIFFERENCE between your basis (what you paid) plus any improvements you've made to the property and the sales price less closing costs.

Because it was a rental, you will have depreciation recapture as well.

You will have to convert to US dollars for reporting purposes.

I am assuming that the rental income and expenses have been reported on your US tax return each year.

Please let me know if I can assist you further.

Thank you and best regards,

Barb

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Customer reply replied 24 days ago
it doesn't matter when i moved to the US?
I bought the property in 2004 where i grew up and only moved to the US on 2013.
I started filling taxes only when i started working in the US in 2013, i did not have any tax ties with the US prior to that.Does the IRS require i pay taxes (capital gains) for periods of time that are prior to when i first started working in the US?
Customer reply replied 24 days ago
just to be clear, I was not tax liable prior to 2013.
Tax Professional: Barbara, Enrolled Agent replied 24 days ago

I understand what you're saying,

BUT

The capital gain is calculated on the DIFFERENCE between your basis (as adjusted) and the sales price (as adjusted) when you sell the property.

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