Now that I am living in the USA and waiting for my AOS, I am starting to think about what to do with the house I own in Australia, has anyone sold their home overseas? Is it worth it after the taxes and losing all the money on the dollar conversion also? I wonder whether it's more worth it to lease it and get whatever possible from rent, or to just sell it and buy one here. Any suggestions?

I think you should definitely let me have it. It's the right thing to do.

If you don't want to do that....

Renting it out will get old, unless you have a property management company take care of it for you. This is worth doing it is is paid for and you don't owe anything. If you still owe on the house, then I would just sell it. Put a real estate agent in charge of the sale and call it good. As for the proceeds - well, you could invest in the stock market through a local (Australian) broker. Or, convert the funds to US and invest here, or convert to euros and invest in a market there. Just depends on what your interests are. If you cant afford to buy a house here without that money, then selling it is definitely the thing to do. Owning your own home, at least in the US, is the fast ticket to wealth for sure. I live in a "slow growth" area (Alaska), not some insane place like California or whereever, and even here, the growth is pretty good. I bought this house in 2000 for $156K and it's now worth about $300K, 7 years later. That's money I simply would not have if I were renting. Not to mention the peace of mind owning your own place, blah, blah, blah.

Hope this helps!
AKDiver

If you can rent and get a good income. then rent it. If not sell it and invest in property here.

If I could give my house to you, that would mean that I have more money than I know what to do with I do own the house outright, I am thinking of getting a property manager and renting it, but it would only bring in 170dollars AUD per week, which is good but then I think about the dollar comparison it would be a lot less. Then if I sell , I wonder how much tax would be taken out and how much I would actually lose.
Thanks for the advice! It is very helpful.

Thanks for your advice, I am leaning toward selling because the australian dollar is a lot lower, I will keep thinking about it. Thanks for your advice.

I recently asked the IRS about this myself. I wanted to know if the profit from the sale of our house was tax-liable. They told me that sales of overseas properties by USCs (I'd guess it's the same for LPRs) are treated like sales of homes in the USA, i.e. if it's your primary residence and the gain is less than $250,000 you do not even have to declare it on your tax return.

Double-check with the IRS, but I don't think selling your house would present many (if any) problems from a tax perspective.

I really dont know that much about this as I did not look too deep into it when I was in the same situation. However I read that if the LPR brought the money from the sale of the house with them into the US then that was ok. But once they activated their LPR status them the money would become taxable.

The money is as 'taxable' as all the other income one receives in a year, but everything I've read about this does not distinguish between USCs and LPRs in terms of their reporting obligations or how much the gain can be as a single filer ($250k) or a joint filer ($500k). Publication 523 should answer some if not all of those questions:

http://www.irs.gov/publications/p523/index.html

I think in terms of an LPR if you sell your house before you leave the UK (or home country) then you are bringing money with you its kinda like bringing savings. I think it only gets treated as taxable income if you receive it after you have activated your visa and become an LPR then you would have to treat it like taxable income as would any USC.

I think your case may be different HA as you are a USC so the money you make from your house in the UK will need to be treated as taxable income immediately.

Yes...after you become an LPR the tax rules change.



Yes, but that doesn't mean that the OP is going to have to pay capital gains taxes on the sale of her home, which I think was her original concern.

Homeowners in the UK have a whole different set of tax problems, as the gains from the sale of a house...once translated into dollars...can be enormous. The Australian dollar is even weaker than the US dollar so the odds of the OP exceeding the $250k gain limit is reduced. If she doesn't make more than $250k USD in profit (assuming she's filing as single) then she doesn't even have to report the sale of her house on her tax return, hence no tax problem...sorta like savings.

Fair comment.

I dont envy you though having to declare your money to the IRS. Can't you filter it in little by little.

Meh *shrug* I grew up with it, I'm used to it, and my tax returns here in the UK have been very very simple. I fill out a 1040, tack on a 2555-EZ, send it off, and forget about it. Hopefully I won't get audited when I get back.

I can see benefits to filling out a tax return because you can deduct a hell of a lot from your income, saving you some money. In the UK you pay them everything then have to claim it back through tax credits, which isn't that easy in itself and they make so many mistakes with it that you could end up owing them money. Every so often there's a horror story in the papers about someone owing HMRC £20,000 because their tax credits got screwed up. Then again, the IRS can also be a nightmare.

The IRS hasn't gotten one thin dime from me since 2001, since that was the last calendar year that I worked in the USA. I don't have to PAY anything, I just have to declare my earnings. It's meant to catch rich tax cheats, which I applaud, so I don't really mind it too much.

Oh great, thank you so much for this info!!!

Yes, my home is worth around 180,000 to 200,000 so it would be less than the 250,000.

Awesome!

When I get back to the USA I'm going to get a second bachelor's degree, this time in accounting...so I like these tax-related questions.