Selling in the US help needed

Discussion in 'The Buying & Selling Process' started by icic, 22nd Feb, 2019.

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  1. icic

    icic Well-Known Member

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    Hi all,

    I am contemplating about selling my US property and move the money back here. We had made a decent capital gain there in both the value and exchange rate. Since I have never sold there, I am unsure of the sale process, how is it being taxed and how I can transfer the money back to Australia legitimately with the tax treaty we have with the US. Would be great if anyone @MTR @Mick Butterfield (@Karina @sparky123 @Jordan Sinclair @Gaka ) have done this before to give me a few pointers would be much appreciated.
     
  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    You are a AU tax resident ? If so,....

    You need to report and pay US tax on the gain in USD terms.
    You also need to pay AU CGT on same but in AUD terms. Subject to a specific case before the courts under appeal only some of the US tax may be creditable. Perhaps 50%. It is under appeal. And the AUD tax applies to 50% (hence why the 50% credit could be a issue)

    You need to apply for a ITIN from the IRS. Its a tax file number only for aliens (no funny eyes needed). The US system typically gives a TFN based on a social security number otherwise but you arent eligible for that basis. Then lodge within TIME !!! (Dont do it late)...The USA has some bizarre rules about late lodgement of ITIN returns. Nasty stuff that can affect a holiday. Yeah not welcome to America because you lodged a day late - No joke.. . A local US CPA may assist lodging. You may find the US sale is subject to withholding when it settles. Your US lawyer and tax person can address that. When you lodge the US return any witholding taken from sale will be credited and a refund could be due.

    Moving the $$ here poses no concerns. If asked Austrack would seek evidence of where the $$ came from and I'm sure you have the docs from the sale. No drama. Its not illegal to move explained money around. But agencies do look for large sums and you can be asked to explain. Thats all.
     
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  3. Jordan Sinclair

    Jordan Sinclair Well-Known Member

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    Hi @icic

    If you need, I can refer you to a US CPA who knows international tax considerations etc.

    I recently sold a US property so can advise you of the outcome at tax time.
     
    icic likes this.
  4. ToBeFree25

    ToBeFree25 Active Member

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    What makes you want to sell those houses in US ?
     
  5. Jordan Sinclair

    Jordan Sinclair Well-Known Member

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    Flips and moving on to bigger ventures.
     
  6. MTR

    MTR Well-Known Member

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    Take profits off the table, move into other rising markets using 1031 exchange....deferring CGT
    Keep riding the wave and increase cashflow
    ;)
     
    icic likes this.
  7. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    1031 exchange rollovers need to be carefully considered since it defers the CGT. Eventually if you exit property then all accrued gains (from each 1031 rollover?) result in a higher tax position. And the strict timing and sequence rules may fail to be met and trigger a tax problem when cashflow isnt available.

    1031 cant now be used for other markets excepting other US property regions. Trump made changes to s1031 tax law which limit 1031 to REAL property only. And "like kind" properties doesnt apply when comparing US property and non-US property. So you cant use it when departing the USA

    s1031 wont apply to flipping since "dealers" are excluded from the rules.

    Important to seek US tax advice rather than reading inaccurate internet posts on this issue. Lot of misinformation but a CPA should assist.

    Failing to lodge and report rental income can mean 1031 cant be used.
     
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  8. icic

    icic Well-Known Member

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    hey @jordan, would be great if you can recommend a Us CPA for me to have a chat with. Can would be great to have a chat with you about the process involved. Can you please pm me some details? Thanks
     
  9. icic

    icic Well-Known Member

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    thanks for the great reply Paul, are you saying 50% is the tax rate for profits here ?
     
  10. MTR

    MTR Well-Known Member

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    Not going to share any tax advice on this forum, I know better than this. Start researching for good US tax accountants, my US accountant is not taking on any new clients.

    US tax laws are very complex
     

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