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Author Topic: Wife wants to sell her Minsk apartment.....  (Read 1986 times)

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Online Hammer2722

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Wife wants to sell her Minsk apartment.....
« on: April 21, 2021, 06:00:01 PM »
So, the wife wants to sell her apartment in Minsk and wants to know if she transfers the sale money back to the states, will the US tax her on any of it? I believe she will. So she wants to know how she can avoid paying taxes on it. Has anyone had any experience with this? Any info would be a big help. Thanks in advance.
« Last Edit: April 21, 2021, 06:16:16 PM by Hammer2722 »
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Online tfcrew

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Re: Wife wants to sell her Minsk apartment.....
« Reply #1 on: April 21, 2021, 06:25:12 PM »
See my PM.
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Offline Boethius

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Re: Wife wants to sell her Minsk apartment.....
« Reply #2 on: April 21, 2021, 06:33:27 PM »
There will be a capital gain on the difference between the original cost of the property to your wife, plus costs incurred since (renovations, for example) and the sale proceeds.  The original cost should be the fair market value of the property when your wife left Belarus, plus any renovations she has made since then.  Use the USD value on the date of the sale for the conversion value on sale date, and an average of the USD in the year for the original cost plus associated costs.

Belarus may also tax the sale, or there may be a withholding tax, and if they do, your wife will receive a tax credit for the Belarussian tax paid, per the US-Belarus Tax Treaty.

The relevant form -

http://www.irs.gov/pub/irs-pdf/f8949.pdf

You may want to check if the property is eligible for the $250,000 exemption ($500,000 for couples).  I believe this is for a principal residence, but I could be wrong on that.  ML likely would know.
« Last Edit: April 21, 2021, 06:37:47 PM by Boethius »
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Offline ML

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Re: Wife wants to sell her Minsk apartment.....
« Reply #3 on: April 21, 2021, 07:57:46 PM »
There will be a capital gain on the difference between the original cost of the property to your wife, plus costs incurred since (renovations, for example) and the sale proceeds.  The original cost should be the fair market value of the property when your wife left Belarus, plus any renovations she has made since then.  Use the USD value on the date of the sale for the conversion value on sale date, and an average of the USD in the year for the original cost plus associated costs.

Belarus may also tax the sale, or there may be a withholding tax, and if they do, your wife will receive a tax credit for the Belarussian tax paid, per the US-Belarus Tax Treaty.

The relevant form -

http://www.irs.gov/pub/irs-pdf/f8949.pdf

You may want to check if the property is eligible for the $250,000 exemption ($500,000 for couples).  I believe this is for a principal residence, but I could be wrong on that.  ML likely would know.


For exemption:  In general, to qualify for the Section 121 exclusion, you must meet both the ownership test and the use test. You're eligible for the exclusion if you have owned and used your home as your main home for a period aggregating at least two years out of the five years prior to its date of sale. You can meet the ownership and use tests during different 2-year periods. However, you must meet both tests during the 5-year period ending on the date of the sale. Generally, you're not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home. Refer to Publication 523 for the complete eligibility requirements, limitations on the exclusion amount, and exceptions to the two-year rule.

http://www.irs.gov/taxtopics/tc701

But, even without this exclusion, there is a zero capital gains tax bracket for gains up to X amount.
Unfortunately the X amount is not a fixed number and depends on several factors related to how much other income the person (or couple) report.

The only way to determine the X amount is to run all the numbers for your tax return.
But even after the X amount is exhausted, the cap gains tax rate is only 15% until way up into $400,000 plus of income.  So not too bad.
Winston Churchill.  “The best argument against democracy is a five-minute conversation with the average voter.”

Offline Donna_Pedro

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Re: Wife wants to sell her Minsk apartment.....
« Reply #4 on: April 21, 2021, 08:46:32 PM »
So, the wife wants to sell her apartment in Minsk and wants to know if she transfers the sale money back to the states, will the US tax her on any of it? I believe she will. So she wants to know how she can avoid paying taxes on it. Has anyone had any experience with this? Any info would be a big help. Thanks in advance.


The answer is no. She might pay  tax on interest generated by the money on her savings account.
Kaplah!

Offline GQBlues

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Re: Wife wants to sell her Minsk apartment.....
« Reply #5 on: April 21, 2021, 09:16:55 PM »
Your post read as though getting taxed is a matter that can happen only to her and not involving you. LMAO.

http://www.hg.org/legal-articles/the-tax-implications-for-u-s-citizens-of-selling-a-property-abroad-54651

But you folks have options. For starters, seek counsel that specialize in this matter.
« Last Edit: April 21, 2021, 09:20:15 PM by GQBlues »
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Offline ML

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Re: Wife wants to sell her Minsk apartment.....
« Reply #6 on: April 22, 2021, 09:48:45 AM »

The answer is no.

Wrong.   

USA citizens and green card holders, are required to file a U.S. income tax return and report worldwide income no matter where they live.

There might be exemptions, exclusions, zero tax bracket capital gains, etc., but it must all be initially reported.
Winston Churchill.  “The best argument against democracy is a five-minute conversation with the average voter.”

Offline GQBlues

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Re: Wife wants to sell her Minsk apartment.....
« Reply #7 on: April 22, 2021, 12:24:47 PM »
Best get this done sooner than later. Taxes across the board will be increased to pay for the pseudo-economic relief/green new deal.
Quote from: msmob
1. Because of 'man', global warming is causing desert and arid areas to suffer long, dry spell.
2. The 2018 Camp Fire and Woolsey California wildfires are forests burning because of global warming.
3. N95 mask will choke you dead after 30 min. of use.

Offline ML

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Re: Wife wants to sell her Minsk apartment.....
« Reply #8 on: April 22, 2021, 03:06:24 PM »
Best get this done sooner than later. Taxes across the board will be increased to pay for the pseudo-economic relief/green new deal.

For sure.

We sold a couple of parcels in 2020 and carried 90% of the financing until buyers get construction loan.

Under tax code there are two  alternatives:
1) Report all in 2020
2) Use Installment sales option and only report 10% in 2020 and 90% in 2021.

I was going to do alternative 2, but now I am leaning toward alt 1 in view of possibility of LTCG provision being rescinded, or tax rate  going up substantially.

Since tax due date extended to May 15th this year, I have had a little more time to play around with it.

Another buyer may close a deal with us soon; or maybe not when they find out what current construction costs are.

If yes, I will definitely go  with option 1 for the 2020 sales.
Winston Churchill.  “The best argument against democracy is a five-minute conversation with the average voter.”

Offline BillyB

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Re: Wife wants to sell her Minsk apartment.....
« Reply #9 on: April 22, 2021, 03:48:23 PM »
USA citizens and green card holders, are required to file a U.S. income tax return and report worldwide income no matter where they live.

There might be exemptions, exclusions, zero tax bracket capital gains, etc., but it must all be initially reported.


I've read this too. The only way around it is to lie on tax returns cheating the government out of their cut. If an apartment is sold and money brought back to the US in less than $10,000 increments at a time, a person might be able to avoid detection by the IRS.
Fund the audits, spread the word and educate people, write your politicians and other elected officials. Stay active in the fight to save our country. Over 220 generals and admirals say we are in a fight for our survival like no other time since 1776.

Offline Donna_Pedro

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Re: Wife wants to sell her Minsk apartment.....
« Reply #10 on: April 22, 2021, 04:57:53 PM »
Wrong.   

USA citizens and green card holders, are required to file a U.S. income tax return and report worldwide income no matter where they live.

There might be exemptions, exclusions, zero tax bracket capital gains, etc., but it must all be initially reported.


I talked to IRS about the situation and they told me all I needed to pay is tax on money interest.
Kaplah!

Offline Donna_Pedro

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Re: Wife wants to sell her Minsk apartment.....
« Reply #11 on: April 22, 2021, 05:04:33 PM »

I've read this too. The only way around it is to lie on tax returns cheating the government out of their cut. If an apartment is sold and money brought back to the US in less than $10,000 increments at a time, a person might be able to avoid detection by the IRS.


I send the money by wire transfer from my bank account in Russia to my bank account here, so it was all transparent and all they did was sent me 1099-INT.
Kaplah!

Offline ML

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Re: Wife wants to sell her Minsk apartment.....
« Reply #12 on: April 23, 2021, 09:11:58 AM »

I talked to IRS about the situation and they told me all I needed to pay is tax on money interest.

Yeah . . . those talks with IRS are more authoritative than the actual written tax codes.
Winston Churchill.  “The best argument against democracy is a five-minute conversation with the average voter.”

Online tfcrew

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Re: Wife wants to sell her Minsk apartment.....
« Reply #13 on: April 23, 2021, 10:55:10 AM »
  cheating the government out of their cut.
Right

http://www.forbes.com/sites/robertwood/2016/01/27/missing-an-irs-form-1099-for-your-taxes-keep-quiet-dont-ask/?sh=7d99f3732db1
Now.... the 1099INT is for interest. We all get that from the bank on our [meager] savings account. The sale of property is not that. The real estate proceeds--------
Quote
Reporting the Sale     You must report the sale of your home just like everyone else, just as you would if it were situated in the U.S. That's because the United States taxes its citizens on their worldwide income, not just what they earn or collect between its shores.
    However, the Internal Revenue Code provides certain exclusions if the property was actually your home. If the real estate was your principal residence and you lived in and owned the house for at least 24 out of the last 60 months ending on the date of the sale, you can exclude $250,000 of capital gains from taxation. This increases to $500,000 in capital gains if you're married and you and your spouse file a joint return.1
http://www.thebalance.com/us-taxes-on-sale-of-foreign-home-3973966
When Svetlana sold her property in Ukraine--we deducted everything we could...realtor fees... remodeling ....replacing plumbing fixtures...listing fees...having to fly over to Odessa to do the transaction is deductible...lodgings for a month [even though she stayed with friends] was deductible... and other stuff I can't even think of right now....Oh yeah---there was actually a tornado in Odessa when she was there and damaged some patio stuff.

Also---the taxman would have no interest into checking on how much the property cost initially.They only care about the difference between that and the final sale price minus expenses. They will take you on your word and then we gave them their cut [wasn't that much]
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Online 2tallbill

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Re: Wife wants to sell her Minsk apartment.....
« Reply #14 on: April 23, 2021, 11:22:31 AM »

I talked to IRS about the situation and they told me all I needed to pay is tax on money interest.

I don't know your age or the age of your husband, or how long ago this happened, or what
you plan to do with the money, or what state you live in but there are some exemptions,
exclusions, methods and strategies to exclude the income depending on several different
situations. My advice would be to seek the advice of a tax professional and NOT the IRS.

There was a time in my life I knew all about the rules and strategies, but I am decades out
of date.

Taking advice from the IRS about your taxes is like asking a drug addict to hold your money
except that the IRS is far less reliable.

If you wanted to research this for your self Google terms like "tax exclusion selling home",
"like kind exchanges" but after doing that I would still advise talking to someone who
knows all the current laws. 

Udachi!

Bill
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Offline BillyB

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Re: Wife wants to sell her Minsk apartment.....
« Reply #15 on: April 23, 2021, 11:23:27 AM »
They will take you on your word



Most of the time the IRS will take people on their word but if they decide to audit, they will always find a problem.
Fund the audits, spread the word and educate people, write your politicians and other elected officials. Stay active in the fight to save our country. Over 220 generals and admirals say we are in a fight for our survival like no other time since 1776.

Offline GQBlues

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Re: Wife wants to sell her Minsk apartment.....
« Reply #16 on: April 23, 2021, 12:59:06 PM »

Most of the time the IRS will take people on their word but if they decide to audit, they will always find a problem.


= or <$600.00 yes...over that, better have receipts/back-ups.
Quote from: msmob
1. Because of 'man', global warming is causing desert and arid areas to suffer long, dry spell.
2. The 2018 Camp Fire and Woolsey California wildfires are forests burning because of global warming.
3. N95 mask will choke you dead after 30 min. of use.

Offline Donna_Pedro

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Re: Wife wants to sell her Minsk apartment.....
« Reply #17 on: April 24, 2021, 03:44:19 PM »
Right
Also---the taxman would have no interest into checking on how much the property cost initially.They only care about the difference between that and the final sale price minus expenses. They will take you on your word and then we gave them their cut [wasn't that much]


Hold on.. you mean,  after I havepaid taxes in Russia ( non-residents for tax purposes pay a lot) I need to pay them in the USA? thats double dipping!
« Last Edit: April 24, 2021, 03:47:22 PM by Donna_Pedro »
Kaplah!

Online 2tallbill

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Re: Wife wants to sell her Minsk apartment.....
« Reply #18 on: April 24, 2021, 04:38:05 PM »

Hold on.. you mean,  after I havepaid taxes in Russia ( non-residents for tax purposes pay a lot) I need to pay them in the USA? thats double dipping!

You can credit the Russian taxes against the American, BUT there
is a chance you will not have to pay any American if you qualify for
the once in a lifetime exclusion or a like kind exchange.
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Offline ML

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Re: Wife wants to sell her Minsk apartment.....
« Reply #19 on: April 24, 2021, 05:44:19 PM »
What once in a lifetime exclusion are you referring to ?
Winston Churchill.  “The best argument against democracy is a five-minute conversation with the average voter.”

Online 2tallbill

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FSUW are not for entry level daters
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There are a hundred ways to be successful and a thousand ways to f#ck it up
Kiss the girl, don't ask her first.

Offline ML

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Re: Wife wants to sell her Minsk apartment.....
« Reply #21 on: April 26, 2021, 08:14:45 AM »
But Big Bill, you said 'once in a lifetime.'

That's what I was questioning.

It is not 'once in a lifetime.'
Winston Churchill.  “The best argument against democracy is a five-minute conversation with the average voter.”

Online 2tallbill

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Re: Wife wants to sell her Minsk apartment.....
« Reply #22 on: April 27, 2021, 07:33:14 AM »
But Big Bill, you said 'once in a lifetime.'

That's what I was questioning.

It is not 'once in a lifetime.'

ML, they used to have something called "once in a lifetime exclusion",
over the years it morphed. Back in the late 1970's early 1980's I
worked for my Dad as a tax consultant. All my knowledge of tax law
is very, very stale. That's why I suggested that they talked to a tax
professional. 

I Googled "once in a lifetime sale of house" and found an article from
1987.

UNDERSTANDING THE ONCE-IN-A-LIFETIME EXEMPTION
http://www.washingtonpost.com/archive/realestate/1987/07/25/understanding-the-once-in-a-lifetime-exemption/467f29cf-6631-4050-a378-2a74ff3a9ccc/

FSUW are not for entry level daters
FSUW don't do vague
FSUW like a man of action. Be a man of action 
If you find a promising girl, get your butt on a plane.
There are a hundred ways to be successful and a thousand ways to f#ck it up
Kiss the girl, don't ask her first.

Offline ML

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Re: Wife wants to sell her Minsk apartment.....
« Reply #23 on: April 27, 2021, 07:44:20 AM »
ML, they used to have something called "once in a lifetime exclusion",
over the years it morphed.


Yes, it certainly has morphed.

Now this exclusion (up to certain amounts and with some requirements) is available every two years . . . not once in a lifetime.

The Taxpayer Relief Act of 1997.
Winston Churchill.  “The best argument against democracy is a five-minute conversation with the average voter.”

 

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