Capital Gain For Non U.S.A (Foreigner)

Comments(4)

• 
  DaveT23rd July, 2003

  Quote:what is his long term capital gain rate if he sells it to me Income from U.S. sources is taxable whether received while a nonresident alien or a resident alien unless specifically exempt under the Internal Revenue Code or a tax treaty provision.
  
  Generally, tax treaty provisions apply only if your brother is a resident of a country that has a treaty with the United States and is a U.S. resident for treaty purposes for the taxable year (dual resident status).
  
  To report the income from the sale of his property, your brother would file Form 1040NR, U.S. Nonresident Alien Income Tax Return. His maximum long term capital gain tax rate will be 15%, while depreciation recapture will be at a 25% rate.
  
  Quote:What would you suggest the best why to sell it to me and lower the capital grain rate?Any sale is a taxable sale -- whether you are the buyer or someone else. Right now, the long term capital gain tax rate is the lowest it has ever been during my lifetime.

• 
  Salmar24th July, 2003

  Thank you Dave T for your explaination on capital gain taxes for foriegners.
  
  Much appreciated.

• 
  wexeter24th July, 2003

  Does your brother want to cash out or reinvest in other property? You might want to consider a 1031 exchange transaction if he intends to reinvest. You brother will still qualify for a 1031 exchange, but he would have to reinvest in domestic (U.S.) property.
  [addsig]

• 
  Salmar24th July, 2003

  Hi Bill Exeter,
  
  My brother would like to take some cash out and reinvest the balance, is that allowed or does he have to invest all of the proceeds? And do you know if real estate commission, closing cost and improvement on property taxes are allowable deductables in order to lower capital gains? He has held the condo for over 5 years is their a tax table that would show the different tax rate? Thanks for your helpl