US TAX - Do I PAY TAX ON FUNDS I AM BRINGING INTO THE US FROM ABROAD ?

[50 cool 50 0]

Aaron and Nick, hanyou both, thats sounds spot on and the kind of intelligent answer I was looking for.

[50 cool 50 0]

Aaron and Nick, than you both, that sounds spot on and the kind of intelligent answer I was looking for.

I do not want to get in trouble and I do not want to chance anything.

i think maybe my accountant has not had much experience with this kind of thing, and maybe I should get a new one!

While we are on the tax topic-

I have another related tax question to you both.

When I arrived in the USA 2008 I invested some of my Europe earned savings in a house in Las Vegas.(pre permanent resident on my 3 month visa waiver status) .

I paid $25,000 for it and spent $2,000 on renovations materials, then sold it this year for $29,000 (after becoming a permanent resident) .

Not a huge profit killing but my accountant suggested that this now shows as $29,000 profit on the books for tax purposes because I was not in the tax system when i bought the property?? Any thoughts or advice about this?

Would you happen to know is there a form I can file to show what I paid for the house and that kind of thing that I could take to my accountant.

thanks for your replies

B

[aaron2020 11,651]

While we are on the tax topic-

I have another related tax question to you both.

When I arrived in the USA 2008 I invested some of my Europe earned savings in a house in Las Vegas.(pre permanent resident on my 3 month visa waiver status) .

I paid $25,000 for it and spent $2,000 on renovations materials, then sold it this year for $29,000 (after becoming a permanent resident) .

Not a huge profit killing but my accountant suggested that this now shows as $29,000 profit on the books for tax purposes because I was not in the tax system when i bought the property?? Any thoughts or advice about this?

Would you happen to know is there a form I can file to show what I paid for the house and that kind of thing that I could take to my accountant.

thanks for your replies

-------------------------------------------

Your freakin' "accountant" is an idiot. Have you checked his/her license?????

Basic principal of accounting; (money received selling asset) - (money paid acquiring asset) = profits

The highest profit you could have earned would be $4000 ($29000 sale price - $25000 acquisition cost). Some of the $2000 you spent on renovation may have been deductible when you sold, thus reducing your profits. The most you would be taxed on is the $4000.

FIRE YOUR ACCOUNTANT. YOU NEED TO FIND A COMPETENT ACCOUNTANT!!!!!

Think about it in these terms:

Example: I have $100,000. I invest it and make $1 in profits. My tax rate is 15%.

DUMB ACCOUNTANT:

Under your accountant's interpretation of taxable profits, I would have to pay $15,000 in taxes on the transaction. HOW DOES THAT ENCOURAGE INVESTMENT???????? I would rather just keep it in a money market account.

PROPER ACCOUNTING:

I have $1 in profits, and I pay 15 cents in taxes. The $100000 is available to invest. This encourages investing.

[Nich-Nick 3,353]

Yep, the accountant knows less than me and I'm just an old lady who's done her own taxes since the dark ages before calculators.

Here's some IRS info to read

http://www.irs.gov//Help-&-Resources/Tools-&-FAQs/FAQs-for-Individuals/Frequently-Asked-Tax-Questions-&-Answers/Capital-Gains,-Losses,-Sale-of-Home

And here's some more layman language articles discussing how to minimize capital gains on real estate.

http://www.nolo.com/legal-encyclopedia/avoid-capital-gains-tax-selling-home-29901.html

http://taxes.about.com/od/taxplanning/qt/home_sale_tax.htm

This discussion has made me realize I didn't even report the sale of my own home in 2009. I should have reported it and taken the exclusion. I wouldn't owe anything, but the IRS likes to see it on paper, even if you don't owe them in cases like this. At the time I had been ill and actually closed the sale from a hospital bed in another city. The hospital provided a notary and the nurses station had a fax machine. Two surgeries and 4 months later i was on the mend but it was during that time I filed taxes. Uh-oh. But the money "on the books" as your accountant calls it isn't reported to the IRS on a 1099 like sale of stock by a brokerage. If they ever, in any way (which I can't figure out how), found out about it, I will plead Vicodin insanity. I don't think they would bother because I don't owe them anything as the gain is $100,000 before adjusting it with improvements, closing costs, etc and well under the married exclusion of $500k.

What do you think Aaron? Would you do a 1099X for 2009? Transfers of large sums of money are reported to the Treasury as part of the Patriot Act, but that's not to the IRS.

[aaron2020 11,651]

Yep, the accountant knows less than me and I'm just an old lady who's done her own taxes since the dark ages before calculators.

Here's some IRS info to read

http://www.irs.gov//Help-&-Resources/Tools-&-FAQs/FAQs-for-Individuals/Frequently-Asked-Tax-Questions-&-Answers/Capital-Gains,-Losses,-Sale-of-Home

And here's some more layman language articles discussing how to minimize capital gains on real estate.

http://www.nolo.com/legal-encyclopedia/avoid-capital-gains-tax-selling-home-29901.html

http://taxes.about.com/od/taxplanning/qt/home_sale_tax.htm

This discussion has made me realize I didn't even report the sale of my own home in 2009. I should have reported it and taken the exclusion. I wouldn't owe anything, but the IRS likes to see it on paper, even if you don't owe them in cases like this. At the time I had been ill and actually closed the sale from a hospital bed in another city. The hospital provided a notary and the nurses station had a fax machine. Two surgeries and 4 months later i was on the mend but it was during that time I filed taxes. Uh-oh. But the money "on the books" as your accountant calls it isn't reported to the IRS on a 1099 like sale of stock by a brokerage. If they ever, in any way (which I can't figure out how), found out about it, I will plead Vicodin insanity. I don't think they would bother because I don't owe them anything as the gain is $100,000 before adjusting it with improvements, closing costs, etc and well under the married exclusion of $500k.

What do you think Aaron? Would you do a 1099X for 2009? Transfers of large sums of money are reported to the Treasury as part of the Patriot Act, but that's not to the IRS.

You do not need a 1099.

You can amend your return for 2009 to reflect the sale and exclusion.

The IRS has 3 years to audit a return and 10 years to collect back taxes. Since you are outside of the statue of limitation, the IRS will probably not audit you. You don't owe any taxes so it's useless to go after you. Some people would probably not amend their returns because the possibility of an audit is extremely low.

You need to consult your own tax and legal professional to decide what to do.

[50 cool 50 0]

Back to the original question...

Thanks for the links to the articles.

From what i understand,

According to the article ;

" You are still eligible for a partial exclusion of capital gains if you sold because of a change in your employment, or because your doctor recommended the move for your health, or due to other unforeseen circumstances"

So my move to California to be with my wife would fall under these circumstances.

The tax break is $250,000 of the net profit for living there at least 2 years of the last 5, so in my case i lived in my apartment for 1 year.

under this article I am entitled to $125,000 tax relief. my profit in the apartment in about $80,000 so I am covered.

I am probably jumping the gun a little here, but please tell me is my thinking correct on this?

Thanks everyone for all your help so far

[N M 96]

Just one point that I'm not sure has been mentioned - apologies if it has.

Did you let the Berlin apartment after you emigrated to California? If so, did you declare this income on your I.R.S. Returns? Chances are that the double taxation agreement with Germany will mean no tax is due, but my understanding is that foreign rental income should still be reported to the I.R.S.

[lilsweetie 30]

I have heard that claiming nonresident tax treatment pursuant to a tax treaty between your home country and the U.S. will also be deemed an abandonment of permanent residence.

Would this be the case if you use a tax treaty in this case?

[NickD 202]

Since we are in kind of the same situtation recently selling an apartment in Venezuela, but with positively no means of bringing that money here, not even through the black market that would be a terrible loss to us. What I would do is to contact the IRS directly, and request the forms and instructions directly from them as to what to do.

Like I always have before with such tax questions. Rather than posting on this board and getting some rather stupid advice and starting an argument from people that are not the least liable for their advice.

I would request they mail the appropiate forms and instructions to me with an explanation of the law.

Another not so fast alternative would to go to the IRS site and explore some odd 13,000 pages of tax laws, or read some odd 1015 tax forms with the instructions. They don't make it easy. I also tend to get migraine headaches from reading these forms.

[NickD 202]

Also to the very best of my knowledge, there is no such thing as an IRS certified tax accountant. Best you can do is to try to get a contract where they are fully liable for any mistakes they can make.

[aaron2020 11,651]

I have heard that claiming nonresident tax treatment pursuant to a tax treaty between your home country and the U.S. will also be deemed an abandonment of permanent residence.

Would this be the case if you use a tax treaty in this case?

Under the IRS's green card test to determine who is a US taxpayer, all LPRs are US residents for tax purposes. LPRs cannot claim non-residency on their US tax returns. (Google "IRS green card test")

An LPR who claims non-US residency on their tax returns is deemed to have abandoned his US LPR status. (Google "USCIS maintaining legal permanent residency status")

[50 cool 50 0]

Hi everyone. I also have another question related to a similar topic.

My friend who is also an expat was talking to me about this last week over a pot of tea.

He says he brought $45,000 USD to the united states when he first arrived here on his tourist visa one year ago .

He married his US citizen wife and recently got his tempory conditional resident green card.

He has asked me does he have to pay taxes on that $45,000 now he has a ssn

Is there a grace law for this cash which was transferred in?

He read he may be exempt from taxes under Clinton offering visas for foreigners bringing investment cash to the USA?

[Harpa Timsah 13,258]

Hi everyone. I also have another question related to a similar topic.

My friend who is also an expat was talking to me about this last week over a pot of tea.

He says he brought $45,000 USD to the united states when he first arrived here on his tourist visa one year ago .

He married his US citizen wife and recently got his tempory conditional resident green card.

He has asked me does he have to pay taxes on that $45,000 now he has a ssn

Is there a grace law for this cash which was transferred in?

He read he may be exempt from taxes under Clinton offering visas for foreigners bringing investment cash to the USA?

No, no one pays tax on money brought to the US. It is not earnings, it is his cash he already had.

[50 cool 50 0]

No, no one pays tax on money brought to the US. It is not earnings, it is his cash he already had.

Adam says he had another $20,000 to bring in but now he has recieved his conditional permananent residence card in the mail.

If he brings this money in, will that now show as earnings which he will pay tax on?

[Harpa Timsah 13,258]

Adam says he had another $20,000 to bring in but now he has recieved his conditional permananent residence card in the mail.

If he brings this money in, will that now show as earnings which he will pay tax on?

No, he didn't earn it recently did he? He already had the money. He is just moving it, right? There is no tax to move cash to the US.